On Tuesday, January 25, the International Monetary Fund (IMF) released the revised World Economic Outlook. The financial institution has cut India’s economic growth forecast to 9% from 9.5% for FY22.
Several rating agencies have downgraded their estimates on the Indian economic growth due to the concerns looming around on new COVID-19 variants & lockdown. In October 2021, the IMF had predicted 9.5% economic growth in FY23 but now it has been slashed to 7.1 per cent.
The global economic growth is expected to be at 4.4% for 2022 & it is likely to be slow down to 3.8% in 2023. As the developed countries like China & US have been greatly affected by the pandemic. IMF’s chief economist Gita Gopinath had stated in a blog post that the global economy has many challenges to overcome due to the third wave of pandemic.
“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. The forecast is conditional on adverse health outcomes declining to low levels in most countries by end-2022, assuming vaccination rates improve worldwide and therapies become more effective,” stated the report by IMF.
However, experts and analysts believe that the economy is poised to grow at a strong rate amid strong collections from GST and other improving macroeconomic factors, furthermore, the Union Budget 2021 will further extend some support and drive the growth ahead.