On Tuesday, April 26, the International Monetary Fund (IMF) stated in its regional economic outlook press briefing that the effect of high global oil prices due to the Russia-Ukraine war will be visible on India’s growth.
The International agency has also stated that there will be a rise in the current account deficit & inflation. In its latest world economic outlook, IMF had forecasted that it expects India’s GDP to grow at 8.2% in 22-2023. Earlier India’s GDP was estimated at 9% for FY23.
“We see the difficult policy trade offs with policymakers supporting growth, while controlling inflation. We have seen that inflation has spilled out of the tolerance band, which is an outcome of war as the country is dependent on oil and commodity imports,” said Anne-Marie Gulde-Wolf, acting director of the IMF Asia & Pacific Department.
IMF has further stated that in the near time some changes have to be made in the monetary policy. “Well communicated monetary policy actions are needed, probably some monetary tightening,” said Anne-Marie. For FY23-2024, IMF has projected India’s growth at 6.9% which is 0.3% lower than the earlier estimate of 7.2%.