Washington (TIP)-The International Monetary Fund (IMF) has cut India’s economic growth forecast to 9% for the current fiscal year ending March 31, joining a host of agencies which have downgraded their projections on concerns over the impact of a spread of new variant of coronavirus on business activity and mobility.

In its latest update of World Economic Outlook on Tuesday, the Washington-based international financial institution, which had in October last year projected a 9.5% GDP growth for India, put the forecast for the next fiscal FY23 (April 2022 to March 2023) at 7.1%. The Indian economy had contracted by 7.3% in the 2020-21 fiscal.

The IMF’s forecast for the current fiscal is less than 9.2% that the government’s Central Statistics Office has predicted and 9.5% that the RBI has estimated. Its forecast is lower than the 9.5% projection by S&P and 9.3% by Moody’s but more than the 8.3% projection by the World Bank and 8.4% by Fitch.

According to the IMF, India’s prospects for 2023 are marked up on expected improvements to credit growth and, subsequently, investment and consumption, building on better-than-anticipated performance of the financial sector.

The IMF said global growth is expected to moderate from 5.9% in 2021 to 4.4% in 2022, half a percentage point lower for 2022 than in the October WEO, largely reflecting forecast markdowns in the two largest economies — the US and China. A revised assumption removing the Build Back Better fiscal policy package from the baseline, earlier withdrawal of monetary accommodation, and continued supply shortages produced a downward 1.2 percentage-point revision for the US, it said.

           Source: PTI