IMF cuts India's GDP forecast to 9 per cent in FY22

The International Monetary Fund (IMF) has cut India's economic growth forecast to 9 per cent for the current fiscal year ending March 31, joining a host of agencies which have downgraded their projections on concerns over the impact of a spread of new variant of coronavirus on business activity and mobility.

In its latest update of World Economic Outlook on Tuesday, the Washington-based international financial institution, which had in October last year projected a 9.5 per cent GDP growth.

The Indian economy had contracted by 7.3 per cent in the 2020-21 fiscal year. The IMF's forecast for the current financial year is less than 9.2 per cent that the government's Central Statistics Office has predicted and 9.5 per cent that the Reserve Bank of India has estimated.The IMF said that global growth is expected to moderate from 5.9 in 2021 to 4.4 per cent in 2022, half a percentage point lower for 2022 than in the October.

In China, pandemic-induced disruptions related to the zero-tolerance COVID-19 policy and protracted financial stress among property developers have induced a 0.8 percentage-point downgrade. The global growth is expected to slow to 3.8 per cent in 2023. "Although this is 0.2 percentage point higher than in the previous forecast, the upgrade largely reflects a mechanical pickup after current drags on growth dissipate in the second half of 2022".

PTI