IMF cuts FY23 India GDP forecast by 80 bps to 7.4%

• Surging inflation and slowdowns in US and China prompted IMF to cut its outlook for global economy.

Key Highlights

• IMF cut 2022 global GDP estimate to 3.2%, 40 basis points lower than April’s forecast.
• Several shocks have hit world economy already weakened by pandemic.
• War in Ukraine led to rise in global prices for food and energy, prompting central banks to raise interest rates sharply.

India to slow in 2023

• It cut India’s growth outlook by 0.8 percentage point to 7.4% for fiscal year 2022.
• It reflected less favourable external conditions and more rapid policy tightening.
• India’s 7.4% GDP growth is second-highest after Saudi Arabia’s 7.6%.
• It will see growth slow down to 6.1% in fiscal year 2023.

Prelims take away

• International Monetary Fund