IMF raises India growth forecast for FY24 to 6.3%

The International Monetary Fund (IMF) lifted its 2023-24 growth projection for India to 6.3% from its July estimate of 6.1%, citing “stronger-than-expected consumption" during the June quarter. In contrast, the agency expects global growth of 3% in 2023 and 2.9% in 2024, with advanced economies expanding by 1.5% in 2023 and 1.4% in 2024.

- Rhik Kundu

The Washington-based agency presents India’s economic growth forecast on a fiscal year basis while it uses the calendar year for other economies.

IMF’s growth estimate for India is a notch below the Reserve Bank of India’s (RBI) forecast of 6.5% gross domestic product (GDP) growth in the current fiscal.

The Indian economy recorded a 7.8% growth during the June quarter. Capital formation, a proxy for investments, and private consumption expenditure, an indicator of consumption demand, reported growth rates of 8% and 6%, respectively, during this period. The gross goods and service tax (GST) revenue, an indicator of consumption, collected during June rose 12% annually to ₹1.6 trillion.

Other multilateral agencies, such as the Asian Development Bank (ADB), expect India to grow 6.4% during 2023-24.

In its latest World Economic Outlook (WEO), IMF raised its US growth projection for 2023 by 0.3 percentage points, compared with its July update, to 2.1%, while cutting China’s 2023 growth forecast to 5% from the earlier forecast of 5.2%.

According to the IMF forecast, the Euro Area will grow 0.7% in 2023 and 1.2% in 2024.