IMF raises India's growth rate forecast for 2024 to 6.3%

Utkarsh Classes Last Updated 12-10-2023

IMF raises India's growth rate forecast for 2024 to 6.3%

Report 4 min read

The International Monetary Fund (IMF) has raised its 2023-24 growth rate forecast for India to 6.3% from 6.1% in July. Whereas the world growth rate is estimated at 3% in 2023 and 2.9% in 2024.

The advanced economy is projected to expand by 1.5 percent in 2023 and 1.4 percent in 2024. For India, the agency said this citing "stronger than expected consumption" during the June quarter.

Key points of the IMF report:

In its report released on October 10, 2023, the IMF said that 81 percent of global economies, including the world's 10 largest economies, have seen a decline in their medium-term growth prospects.
The Washington-based agency forecasts India's economic growth on a fiscal year basis, whereas it uses calendar year for other economies.
This IMF estimate for India is one notch below the Reserve Bank of India (RBI) estimate of 6.5% gross domestic product (GDP) growth in the current financial year.
The Indian economy registered a growth of 7.8 percent during the June quarter. GST collections rose 12% year-on-year to ₹1.6 trillion during June.

Asian Development Bank expect India's growth rate:

Other multilateral agencies like the Asian Development Bank expect India's growth rate to be 6.4 percent during 2023-24.

Growth rate forecast of different countries according to IMF:

In its most recent World Economic Outlook the IMF raised its US growth forecast for 2023 to 2.1%, up 0.3% from its July update.
Lowered China's 2023 growth forecast to 5% from an earlier forecast of 5.2%.
The euro area will grow by 0.7% in 2023 and 1.2% in 2024.
Five emerging market economies—Brazil, China, India, Indonesia and Russia—contributed about 0.9 percentage points to the decline in medium-term global growth prospects between 2008 and 2023.

International Monetary Fund (IMF):

Established: 1945 (India assumed membership of the IMF on December 27, 1945).
Why was there a need for the IMF?
- After the Second World War, the IMF was also established along with the World Bank to help in the reconstruction of war-devastated countries.
- The establishment of these two organizations was agreed upon during a conference held in Bretton Woods, America. For this reason, they are also known as the Bretton Woods twins.
Objective of IMF:
- The aim of the International Monetary System is to ensure the stability of the international monetary system, a system of exchange rates and international payments that enables countries (and their citizens) to transact with each other.
IMF report:
- Releases reports called the Global Financial Stability Report and the World Economic Outlook.
World Economic Outlook:
- It is a survey of the IMF which is usually published twice a year – in the months of April and October.
- It analyzes and forecasts global economic growth over the near and medium term.