In the second quarter of the fiscal year 2021-22, the Indian economy grew at 8.4 percent as compared to the same quarter of the last fiscal year (2020-21). The International Monetary Fund (IMF) has now predicted a further increase in India’s gross domestic product (GDP) in FY23.
IMF raises its forecast for growth in India’s GDP
The International Monetary Fund (IMF) has predicted an increase in India’s GDP by 50 bps to 9 percent. Notably, India’s GDP growth forecast for FY24 was also raised by 50 bps to 7.1 percent.
While explaining the recent update in the World Economic Outlook report, released on January 25, the IMF said that “It expects an improvement in India’s credit growth – which would boost consumption and investment – and better-than-anticipated performance of the financial sector.”
However, the increment in the growth percentage for the next financial year was accompanied by a downward revision in the growth estimate for FY22 to 9 percent.
For the unversed, the IMF, in October 2021, had claimed that India’s economy would grow by 9.5 percent in FY22.
The IMF reported that its prediction for India’s GDP growth in FY22 is dependent on the impact of the Omicron variant of the coronavirus on economic activity.
Though the global growth forecast for 2022 was lowered by 50 basis points to 4.4 percent, it was raised by 20 basis points to 3.8 percent for 2023 although this “largely reflects a mechanical pickup after current drags on growth dissipate in the second half of 2022”.
“The global economy enters 2022 in a weaker position than previously expected. As the new Omicron COVID-19 variant spreads, countries have reimposed mobility restrictions,” the IMF noted.
India’s economy heading towards a big win
As per the World Bank, India’s economy is likely to grow at 8.7 percent in the next financial year 2022-23. On the other hand, China, Indonesia, and Bangladesh are expected to grow at 5.1%, 5.2% and 6.4% respectively among the developing economies.
Earlier as reported by TFI, for the third consecutive quarter Indian economy has posted the highest growth rate among the major economies in the world.
Read more: Economic indicators show the Indian economy has finally defeated the pandemic
Apart from GDP figures, other high-frequency economic indicators like GST, imports, exports, manufacturing PMI, foreign direct investment showed very good results. India remains the second largest FDI recipient in the world, fast catching up with China. The GST collection in the last month was the second-highest (at 1.31 lakh crore rupees) since the implementation of the nationwide indirect tax in 2017.
India’s economy is escalating despite the pandemic’s attack and this should be attributed to PM Modi’s strategies and work towards India’s economic development.
