We must not overlook the risks IMF has noted

Cheer over India's raised growth view shouldn't have us ignore the harm rising US yields, a widening of the West Asia crisis and a possible middle-income trap can do to our economy

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A sense of jubilation greeted the International Monetary Fund (IMF) projection that India's economy will grow 6.3% during 2023-24, placing it among the fastest growing economies. The multilateral lender's latest edition of the World Economic Outlook, released during this year's annual meeting in Marrakech (in conjunction with World Bank), claimed that the 20bps upward revision in India's gross domestic product (GDP) estimate was due to "stronger-than expected consumption" in April-June. As a matter of fact, national income data for that quarter did demonstrate private final consumption growing by over 9% year-on-year, thereby helping overall GDP grow by 7.8%. But then, New Delhi's euphoria over the IMF forecast seems to ignore some of the risks that the institution feels could jeopardize global, and hence Indian, growth prospects. Pierre Olivier Gourinchas, IMF's research director and economics counsellor, said that while the aggregate global economic growth was slowing, there was considerable divergence between growth