IMF sees India as bright spot globally with "very strong economy"; hails growth trajectory

Reposing faith in the Indian Economy, the International Monetary Fund (IMF) division chief Daniel Leigh on Tuesday, termed it a "very strong economy". He stated that with a high growth rate, India is one of the bright spots in the global economy right now.

"Yes, we have a growth rate for India which is 6.8 in 2022. Let's not forget this is one of the bright spots in the global economy right now. Such a high growth rate and it is moderating down to 5.9 with a -.2 revision compared to January, what's happening here is also a set of historical revisions," said Leigh.

On Tuesday, IMF lowered its growth projection for 2023-24 to 5.9% from 6.1%, but despite the significant drop, India continues to be the fastest-growing economy in the world, the World Economic Outlook figures revealed.

"We realise that 2020-2021 has been actually a lot better than we thought and so actually there's less room for catching up. And that pent-up demand from consumers that were informed our previous forecast is therefore, going to be less because they have already had more catching up before. So that's why there's a downward revision this year. Then we go up to 6.3 next year again, a very strong economy which is necessary to allow India to continue to converge towards higher living standards and create those jobs that are necessary," said Leigh. 

#WATCH | Growth rate for India which is 6.8 in 2022, this is one of the bright spots in the Global Economy...we go up to 6.3 next year, again a very strong economy which is necessary to allow India to converge towards higher living standards & create jobs: Daniel Leigh, Chief,… pic.twitter.com/tQxgYBKjHp

— ANI (@ANI) April 11, 2023

The IMF has projected that India's inflation to slow to 4.9% in 2023 and further to 4.4% next fiscal year. IMF growth forecast is lower than the Reserve Bank of India (RBI) projection. The central bank predicted 7% GDP growth for FY 2022-23 and 6.4% in the ongoing fiscal that started on April 1.

Notably, China's growth rate is projected to be 5.2% in 2023 and 4.5% in 2024 against its growth rate of 3% in 2022. The US's growth forecast for 2023 is 1.6%, France's 0.7%, while Germany and the UK are dismal -0.1% and -0.7%, respectively.
In the coming time despite the COVID pandemic lingering and tightening financing conditions as the Russia-Ukraine war continues, most countries will, however, avoid recession in 2023