The International Monetary Fund on Tuesday released its April edition of the World Economic Outlook report, in which it revised its growth estimate for India for the 2022-23 fiscal, reducing it to 8.9 percent, from the 9 percent projected in its January report. Further, the IMF, compared to its January forecast, has slashed India's growth forecast for FY23 by 80 basis points (or 0.8 percent) to 8.2 percent.

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For the 2023-24 fiscal, the IMF reduced India's growth forecast by 20 bps to 6.9 percent. In the report, IMF stated that the downgrade reflects in part a weaker domestic demand--as higher oil prices are expected to weigh on private consumption and investment--and a drag from lower net exports.

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The IMF further said developments in China continue to dominate the outlook for Asia, especially for emerging Asia, of which India is a part. "As noted, the combination of more transmissible variants and the strict zero-COVID strategy in China has led to repeated mobility restrictions and localised lockdowns that, together with an anemic recovery in urban employment, have weighed on private consumption. Recent lockdowns in key manufacturing and trading hubs such as Shenzhen and Shanghai will likely compound supply disruptions elsewhere in the region and beyond," IMF said.

"Moreover, investment growth has slowed significantly. External demand is also expected to be weaker in light of the war in Ukraine. While partially offset by more supportive macroeconomic policy, these factors contribute to a

0.4 percentage point forecast downgrade for 2022," it added.

First Published:Apr 19, 2022 8:11 PM IST