The IMF has lowered India’s GDP growth forecast by 0.20%: May be 5.9% in FY24, significantly lower than the RBI’s estimate.

The International Monetary Fund (IMF) has cut India’s GDP growth forecast for FY24 by 20 basis points, or 0.20%. According to the IMF, India’s GDP will grow at a 5.9% annual rate in FY24. Previously, the IMF predicted that GDP would grow at a 6.1% annual rate.

This IMF forecast is significantly lower than the Reserve Bank of India’s (RBI) FY24 estimate of 6.5%. At the same time, it grew at a 6.8% annual rate in FY23, according to the IMF. In terms of inflation, the IMF expects retail inflation in India to be 4.9% in FY24 and 4.4% in FY25.

The Monetary Policy Committee met this month, and no decisions regarding interest rates were made by the RBI. According to Governor Shaktikanta Das, we haven’t changed the policy rate to maintain the economy’s ongoing recovery, but if necessary, we will act in accordance with the circumstances. Despite all the tensions in the world, India’s economy is still strong.

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Downgraded global economic growth projection

Economists and business executives expressed optimism earlier this year that there wouldn’t be a significant slowdown in the growth of the global economy. The lower energy costs since China’s economy opened up led to the expression of this expectation.

But everything has changed since the banking sector crisis that surfaced last month. In this circumstance, the IMF has lowered its projection for the world economy. According to the IMF, growth will slacken from 3.4% in 2022 to 2.8% in 2023. The IMF had predicted 2.9% growth in January.

IMF did not alter its prediction for China’s GDP growth.

In 2023, China’s growth is projected to be 5.2%.

In FY24, it is anticipated to fall even more, to 4.5%.

This year, the American economy will expand at a rate of 1.6%.

Growth in the Eurozone is anticipated to be 0.8%.

This year, UK growth is predicted to contract by 0.3%.

This year, the Russian economy will expand at a rate of 0.7%.

The most significant impact was on central banks’ monetary policies.

According to the IMF, the central banks’ monetary policies have had the biggest impact on preventing inflation in 2022. However, as a result of the rise in interest rates, the rate of inflation has decreased. Additionally, the banking industry’s flaws have been made public.

Do you know what India’s inflation figures show?

1. Retail inflation in February was 6.44%.

In the month of February, retail inflation in the country fell to 6.44%. It reached a three-month high of 6.52% in January 2023 and 5.72% in December 2022. Retail inflation was 5.88% in November 2022, three months ago. It was 6.07% in February 2022 last year.

2. The wholesale inflation rate was 3.85% at the time.

In February, the Wholesale Inflation Rate (WPI) fell to 3.85%. This is the lowest point in the last 25 months. In January 2023, the wholesale inflation rate was 4.73%. The wholesale inflation rate in December was 4.95%. Inflation has decreased due to the low cost of items such as potatoes, onions, and fuel.

What impact does inflation have?

Inflation and purchasing power are inextricably linked. If the inflation rate is 7%, for example, Rs 100 earned will be worth only Rs 93. As a result, one should invest while keeping inflation in mind. Otherwise, the purchasing power of your money will dwindle.