IMF Raises India's FY24 GDP Growth Forecast To 6.3%

The International Monetary Fund (IMF) has increased India's economic growth forecast for the current financial year 2023-24 to 6.3 per cent from 6.1 per cent previously stated.

The October 2023 World Economic Outlook (WEO) report, released on October 10, outlines the IMF's projections. The IMF predicts that retail inflation in India will rise to 5.5 per cent in fiscal 2023-24 before falling to 4.6 per cent in 2024-25.

According to the IMF, India's growth will remain strong at 6.3 per cent in both 2023 and 2024. The IMF's projection for 2023 has been revised upward by 0.2 percentage points, reflecting stronger-than-expected consumption from April to June.

The Reserve Bank of India (RBI) has projected a consumer price index (CPI)-based inflation rate of 5.4 per cent for the current fiscal year, with gross domestic product (GDP) growth estimated at 6.5 per cent.

In the RBI's bi-monthly monetary policy announcement on October 6, Governor Shaktikanta Das stated that the Indian economy's domestic economic activity is demonstrating resilience, driven by strong domestic demand, in contrast to global trends.

The IMF's latest growth projection comes more than a month after the statistics ministry's official data release on August 31, which showed that the Indian economy expanded by 7.8 per cent in April-June, slightly higher than street estimates, with private consumption growing at 6.0 per cent compared to 2.8 per cent in January-March.

The IMF has stated that the monetary policy projections align with achieving the Indian central bank's inflation target in the medium term.

Additionally, the IMF highlighted that the current account deficit of the country is anticipated to persist at 1.8 per cent of GDP in FY24 and FY25.

The growth forecasts for both China and the Euro area have been slashed by the IMF. The organization also noted that despite the 'remarkable strength' of the US economy, global growth is still low and unequal.