IMF cuts India’s GDP projection to 6.8% in 2022-23

New Delhi: The International Monetary Fund (IMF) has slashed India’s economic growth projection in 2022-23 to 6.8 per cent.

Earlier, in July, it had projected a growth of 7.4 per cent for India in the current financial year.

Reasons like contraction in the US economy in the first half of 2022, a fall in Euro, lockdowns in China and continued Coronavirus outbreaks, have been listed by IMF for trimming India’s growth projection.

“The global economy continues to face steep challenges, shaped by the lingering effects of three powerful forces – the Russian invasion of Ukraine, a cost-of-living crisis caused by persistent and broadening inflation pressures, and the slowdown in China,” said Pierre-Olivier Gourinchas, Economic Counsellor and IMF Director of Research.

Central banks’ fight against inflation may take another two years to play out, increasing unemployment and lowering living standards for many in the world, the International Monetary Fund’s chief economist said.

In an interview with Reuters, Gourinchas said that broad “core” inflation pressures beyond energy and food prices will take time to bring down to central bank targets of about 2%.

“Our projection is that this will start coming down, but we will not be back to central bank targets in 2023,” Gourinchas said of inflation. “We’ll be closer to that in 2024.”

Image courtesy of thesatimes

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