IMF cuts India’s FY23 growth forecast to 8.2%, warns of inflation & supply disruption

The reason for this sudden cut in the growth estimate is due to the negative impact of increasing oil prices due to the ongoing Russia-Ukraine war.

On Tuesday, April 19, the International Monetary Fund (IMF) slashed India’s growth outlook to 8.2% for FY2022-23. Earlier in January, the international body had estimated the growth at 9%.

The reason for this sudden cut in the growth estimate is due to the negative impact of increasing oil prices due to the ongoing Russia-Ukraine war. IMF has recommended the Reserve Bank of India (RBI) to keep an eye on the rising inflation due to global disruption in the supply chain.

The International agency has further projected India’s growth to slow down to 6.9% from 7.1%  in FY2023-24. Whereas the global economical outlook is also negatively impacted by the Russia-Ukraine war. The global growth outlook is likely to slow down from 6.1% in 2021 to 3.6% in 2022-23.

“The war in Ukraine has triggered a costly humanitarian crisis that demands a peaceful resolution. At the same time, economic damage from the conflict will contribute to a significant slowdown in global growth in 2022 and add to inflation,” IMF stated in a statement.

IMF has also stated that inflation will further rise to an all-time high due to the crisis in Ukraine. It’s been more than 50 days since Russia invaded Ukraine, the global economy has collapsed but there are no signs of the war ending anytime soon.

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