IMF Increases India’s Projected Growth Rate For FY2024 By 20 Basis Points To 6.3% – Analysis


Good news about projections of the Indian economy by the International Monetary Fund (IMF) gives us a reason to rejoice. The IMF has said in its Global Financial Stability Report, 2023 that the Indian economy will grow faster this year than previously estimated.

At the same time, India will remain the world’s fastest-growing major economy this year and next year as well. By the way, there is also a worrying estimate that, due to global inflation, the growth rate in the world will be a little slow. If the world is going to be affected by inflation, then it is obvious that despite the rapid growth, the pressure on India’s economy will continue.

According to the International Monetary Fund, India’s GDP growth will be 6.3 percent in 2023 and 2024. Many will be surprised at this growth rate because there are many concerns about the Indian economy. Despite this, it is true that the pace of India’s development is promising. A strong increase of 7.8 percent has been seen in the growth rate in the quarter ending June this year.

The biggest concern is the world economy. When India’s growth rate is fast, then it should get more support at the global level. Demand for Indian products should increase, and Indian services should expand, but when other economies in the world continue to decline, it is obvious that India too will not get the desired benefits of its boom. Therefore, while on the one hand the International Monetary Fund’s estimate gives happiness, on the other hand it also increases concern. The International Monetary Fund expects global GDP growth to be just three percent in 2023.

Based on this IMF report, if we look at the growth estimates for other countries of the world, it is 2.1 and 1.5 percent in America, -0.5 and 0.9 percent in Germany, 0.5 and 0.6 percent in the United Kingdom, 1.3 and 1.6 percent in Canada, 5.0 and 4.2 percent in China, and world growth rates are estimated to be 3.0 and 2.9 percent in 2023 and 2024, respectively. Now, if we look at the world’s economies as a whole, they have not even been able to touch the pre-Corona figures. 

Threats are constantly looming over economies, and the kind of preparedness that should be seen at the global level to deal with these threats is currently missing. Countries will have to think together for the betterment of the world economy as a whole.

First of all, it is not hidden from anyone that the Russia-Ukraine war has increased the oil and energy crisis in many countries around the world, including Europe. Many good economies have suffered. India has also somehow managed its energy needs wisely, but now that war has broken out in the Arab region, the concern has increased a lot.

It is worth noting that more than one-third of the world’s oil supply comes from Arab countries. In such a situation, if the supply is affected, there will be an outcry across the world. Many countries in the world are already troubled by rising oil prices. Therefore, the war breaking out in Middle East will have to be ended soon. Big economies will have to come forward to stop the war.

According to the International Monetary Fund, inflation will increase at a rate of 5.8 percent in 2024, but keep in mind that if the war continues in the Arab region, it will become more difficult to control inflation. Especially countries like India, which do not have their own oil, will be in trouble. Therefore, India should also pay more attention to peace efforts. 

Dr. Nitish Kumar Arya

Dr. Nitish Kumar Arya is an Assistant Professor in the School of Liberal Arts at IMS Unison University. He is working in Public Economics with a special focus on contemporary economic issues.

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