Context:
The International Monetary Fund has raised its forecast for global growth this year in the July update of its World Economic Outlook.
Globally:
News Source: The Indian Express

- Global Growth Projection: The IMF’s World Economic Outlook raised the global growth forecast for the current year to 3%, up from the previous 2.8% forecast in April.
- Reasons: Due to reduced chances of a recession in the US, where inflation declined to 3% in June.
- US Economy Projection: The IMF projects the US economy to grow 1.8% in the calendar year 2023, an increase of 0.2 basis points from the April estimate.
- Global inflation expected to decline: IMF projects global inflation to decrease from 8.7% in 2022 to 6.8% in 2023.
- Core inflation to fall gradually: Core inflation, excluding volatile items, predicted to decrease gradually from 6.5% in 2022 to 4.7% in 2024.
- Downside Risks to Global Growth:
- Various factors, including geopolitical tensions (e.g., war in Ukraine) and extreme weather-related events, could lead to further shocks impacting economic growth.
- Tighter monetary policy may be implemented in response to inflationary pressures, affecting economic activity.
- It has raised India’s GDP growth forecast for the current fiscal year to 6.1% from the previous prediction of 5.9% made in April 2023.
- Reasons: Due to stronger-than-expected growth in the fourth quarter of 2022 and robust domestic investment.
- The National Statistical Office reported an increase in investments by 8.9% during January-March, up from 8% during October-December.
Organisation | India’s GDP Growth Forecast (%) | Reason/Comment |
Asian Development Bank (ADB) | 6.4% | Retained forecast due to recovery in consumption demand in both rural and urban areas, but cautioned about subdued exports due to the global slowdown |
Fitch (Global Rating Agency) | 6.3% | Raised forecast from 6% (predicted in March) to 6.3% due to improved economic conditions |
Additional Information:
About International Monetary Fund (IMF):
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