IMF forecasts: Mark-ups for India
- According to the IMF's latest outlook, risks hanging over the world economy may be starting to ease. India’s economic growth has been revised upwards, but private investment will need to pick up before we can celebrate.
Going by the International Monetary Fund’s (IMF) assessment, risks hanging over the world economy may be starting to ease. “The clouds are beginning to part," Pierre-Olivier Gourinchas, its chief economist, said on Tuesday at the release of IMF’s World Economic Outlook, as the global economy begins its final descent for a “soft landing" amid a steady decline in inflation even as growth holds up.
That said, its expansion is slow and could yet face headwinds. The big challenge, however, will be for central banks to ease monetary policy without letting price pressures loose again. How the world economy performs would matter to India too, for export buoyancy, although its strong domestic impulses are helping it hum along nicely. For India, the IMF now projects 6.7% expansion in 2023-24, up from 6.3% predicted earlier, and 6.5% in 2024-25, also up from 6.3%.
Though still below India’s official estimates of 7% or more, policymakers would take it as an endorsement of robust growth. With fiscal levers set to weaken, however, private investment will need to pick up fast to bear the expansionary burden. The government’s budget-making for the next two fiscal years and beyond must keep that in mind.
