“Growth in India is projected at 6. 1% in 2023, a 0. 2 percentage point upward revision compared with the April projection, reflecting momentum from stronger than-expected growth in the fourth quarter of 2022 as a result of stronger domestic investment,” the IMF said in its latest update to the World Economic Outlook (WEO).
In April, the IMF had cut India’s GDP growth forecast for 2023-24 to 5. 9% from 6. 1%, citing heightened global uncertainty. The latest update to the WEO retained the GDP growth forecast for 2024-25 at 6. 3%. The estimate helps India retain the fastest growing major economy tag for this fiscal year and the next. The IMF’s projection is lower than the Reserve Bank of India’s estimate of 6. 5%. The World Bank estimates growth at 6. 3% and the Asian Development Bank at 6. 4%. India’s economy has staged a robust recovery after the pandemic shock and the impact of the Russia-Ukraine war on supply chains. Several indicators have pointed to the growth momentum sustaining.
The forecast for China is unchanged at 5. 2% for 2023 and 4. 5% for 2024, but with a change in composition: Consumption growth has evolved broadly in line with April 2023 WEO projections, but investment has underperformed due to the real estate downturn in that country. Stronger-than-expected net exports have offset some of the investment weakness, although their contribution is declining as the global economy slows. Global growth will slow from last year’s 3. 5% to 3% this year and the next, a 0. 2 percentage points upgrade for 2023 from April projections.