Indian economy remains a 'bright spot', as per IMF's latest report

By Yashwant Raj

Washington, Jan 31 (IANS) India's economy has retained the crown of "a bright spot" in the International Monetary Fund's latest World Economic Outlook report released on Monday and it is slated to account for half of the global growth in 2023, compared to just a tenth coming from the combined might of the US, the world's largest economy, and Europe, which comprises some of the largest economies.

The Indian economy is expected to grow by 6.1 per cent in 2023, which is 0.7 percentage points lower than 6.8 per cent in 2022, which was earlier projected by the fund in its October forecast. The growth rate will be back at the 2022 level of 6.8 per cent in 2024, the fund has further projected, based on "resilient domestic demand despite external headwinds".

"India remains a bright spot," Pierre-Olivier Gourinchas, an IMF official, wrote in a blog accompanying the World Economic Outlook update, a quarterly report.

"Together with China, it will account for half of global growth this year, versus just a tenth for the US and euro area combined."

The phrase "a bright spot" has been used for India's economic growth for years now by the IMF, the World Bank and other similar bodies, in a nod to its inner resilience against external headwinds and bucking the trend either on the global stage or in the shrunken confine of Asia and South Asia.

India's projected growth rate of 6.1 per cent for 2023 is 0.8 percentage points better than the IMF expectation of 5.3 per cent for a category of countries the fund describes as Emerging and Developing Asia. The 2024 match-up is even better, with India expected to got to 6.8 per cent while the Asian entity will see a decline to 5.2 per cent.

The global economy, however, is in a much better shape than how the fund saw it in October. It is projected to fall from an estimated 3.4 per cent in 2022 to 2.9 per cent in 2023, then rise to 3.1 per cent in 2024.

In October, the IMF projected global growth is forecast to slow from 6 per cent in 2021 to 3.2 per cent in 2022 and 2.7 per cent in 2023, and had called it the "weakest growth profile since 2001 except for the global financial crisis and the acute phase of the Covid-19 pandemic and reflects significant slowdowns for the largest economies: a US GDP contraction in the first half of 2022, a euro area contraction in the second half of 2022, and prolonged Covid-19 outbreaks and lockdowns in China with a growing property sector crisis".

The headwinds for 2023 global economic growth were, as projected by the IMF, "central bank rates to fight inflation and Russia's war in Ukraine".

Additionally, the rapid spread of Covid-19 in China dampened growth in 2022, but the recent reopening has paved the way for a faster-than-expected recovery. Global inflation is expected to fall from 8.8 per cent in 2022 to 6.6 per cent in 2023 and 4.3 per cent in 2024, still above pre-pandemic (2017-19).




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Comment on this article

  • Sameer, Riyadh

    Tue, Jan 31 2023

    Ground reality is just the opposite. IMF does not know how many people/families commit suicides on a daily basis due to unemployment and burgeoning financial liabilities.

    DisAgree [18] Agree [9] Reply Report Abuse

  • Rajesh, Mangalore

    Tue, Jan 31 2023

    To bail out Adani enterprises ....gulf money abudhabi investment pitched in ... Interesting to know Muslim bashing.... hindutva and bhakths their views etc .. Protest for banning movies etc. can also protest on this .. But will not happen as will be silenced by their masters .. bark only when allowed ...

    DisAgree [12] Agree [8] Reply Report Abuse

  • Jossey Saldanha, Raheja Waterfront

    Tue, Jan 31 2023

    People are Hungry & Jobless ...

    DisAgree [15] Agree [9] Reply Report Abuse

  • Raman, Mangalore

    Tue, Jan 31 2023

    More have slipped into poverty . ...Last 10 years .. A Select few .. .. only select Adani Ambani leapfrogged into prosperity .. Now Adani has issues nevertheless suit boot sarkar... If you consider inflation salary less as compared to 5 years back ..

    DisAgree [14] Agree [7] Reply Report Abuse

  • Kedhar, Mangaluru

    Tue, Jan 31 2023

    This IMF report of India being a bright spot and yesterday AK Antonys statement of Rahul getting a new birth, whatever. You have options. You can either believe both or dont believe, partly believe or also believe which one you want to believe. Got my point??

    DisAgree [4] Agree [9] Reply Report Abuse

  • Shivraj, Mangalore

    Tue, Jan 31 2023

    Ten lakh crores bank writeoffs last 5 years --

    DisAgree [9] Agree [7] Reply Report Abuse

  • real kujuma, kodial

    Tue, Jan 31 2023

    some crores must have been given to IMF to release this statement

    DisAgree [33] Agree [19] Reply Report Abuse

  • Guru, Mulki

    Tue, Jan 31 2023

    Aur Acche din aane wale hai.

    DisAgree [3] Agree [25] Reply Report Abuse

  • prakash, Manipal

    Tue, Jan 31 2023

    India inc is highly practical and motivated.... This keeps the nation moving forward.... They need to be encouraged by peace and harmony in the country... If bajapa continues the partisan policy prompted from Nagpur there can be worse disruptions than Covid 19.... Mostly people have realised the ploy of the govt to hold on to power... Recent events may put brakes on the vehemence too....

    DisAgree [24] Agree [12] Reply Report Abuse

  • prakash, Manipal

    Tue, Jan 31 2023

    Agents are there internationally.... Geeta Gopinath, Rishi Sunak and the list will go on....

    DisAgree [13] Agree [14] Reply Report Abuse

  • Thomas, Udupi

    Tue, Jan 31 2023

    India's External Debt stands at US$629.8 Billion as per the Reserve Bank of India's latest report, so what is the IMF bullshitting about India's "BRIGHT SPOT"economy. Ever since 2014 India is in the RED after NM became the President and the Tamilain UK chief of Reserve Bank of India resigned and all corruption started and banks collapsed from 36 banks merged to just 12 banks, with all banks replacing Managers faster than one can change clothes, and interest rates have been slashed from 9 percent to just 4.5 percent, and all the MPs and PM bullshitting announcement after announcements with nothing materializing, simply fooling the poor Hindu majority of India. In fact inflation has shot so high that prices of food and other essentials have gone up four times from the time 2014 Sept to the times negating of COVID. I believe Indians should live as per their judgement of our so called authorities rather than media bullshitting upon the say so of our PM and the BJP

    DisAgree [28] Agree [11] Reply Report Abuse

  • Nithin, Bangalore/SA

    Tue, Jan 31 2023

    Do you understand inflation ?, you cannot expect price of everything from 2014 to 2023 to remain the same, is the price of an apartment in 2014 and 2023 the same or any commodity, you are saying interest rate from 9% went to 4.5, do you know whats the interest rates in Europe or US for fixed depoistsits 1-2% so does it mean US economy is worst than India, understand on what basis interest rates are based on , if you had invested in good companies like Reliance, Tata in 2014 today you money would be 4-5 times invested principal, every country has debts, are you aware how many billions worth of US Bonds china is holding.

    DisAgree [1] Agree [13] Reply Report Abuse

  • Rajan, Mangalore

    Tue, Jan 31 2023

    China believes in common prosperity. They are going after billionaires -- JACK MA stripped of various responsibilities -- Founder of ALIBABA etc. -- Now not to be a wealth destroyer but encourage entrepreneurship -- but in India it is like Oligarchs -- Crony capitalism -- Adani like businessmen -- 800 million in India are at subsistence levels -- OXFAM report -- says -- wealth concentrated in India under 5 % -- own most of the wealth--

    DisAgree [19] Agree [6] Reply Report Abuse

  • Mangalurian, Mangaluru

    Tue, Jan 31 2023

    A just-in-time feel good story. But the "5-trillion Gujju business empre" had a 30% drop in value, no? Will the value climb up, or is it the beginning of a larger downward spiral? All the Gujjus have gone quiet. But propping up what IMF thinks. No one is convinced.

    DisAgree [21] Agree [10] Reply Report Abuse

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