• The world, including India, will experience an overall slowdown in the next year owing to the impact of the Russia-Ukraine war, tightening monetary conditions globally, the highest inflation in decades, and lingering effects of the pandemic, according to the International Monetary Fund.
  • India is projected to grow at 6.8% in the current fiscal year, following 8.7% growth in fiscal year that ended March 31 as per figures released in the IMF’s October 2022 World Economic Outlook: Countering the Cost-of-Living Crisis at the start of the World Bank IMF Annual Meetings here.
  • Growth rate for this year for India has been revised downward by 0.6 percentage points relative to the IMF’s June 2022 forecast, following a weaker output in the second quarter, and subdued external demand, the IMF said.
  • The forecast for the next fiscal year remains unaltered at 6.1%.
  • “India has been doing fairly well in 2022 and is expected to continue growing fairly robustly in 2023,”

Inflation above target

  • Inflation in India was above the RBI’s target, Mr. Gourinchas said, adding that the fiscal and monetary policy should be “probably be on the tightening side”.
  • The IMF has projected 6.9% consumer price inflation this year and 5.1% next year.
  • The IMF expects inflation in India to return to the inflation tolerance band… in fiscal year 2023-24, “and additional monetary tightening is going to ensure that that happens
  • For the world as a whole, growth will slow down from 6.0% in 2021 to 3.2% in 2022 and 2.7% in 2023. This is reflective of a U.S.
  • GDP contraction in first half of 2022, a Euro Area contraction in second half, extended COVID-19 outbreaks in China and a property sector crisis.


  • The U.S. is expected to grow at 1.6% this year followed by a slowing down to 1.0% growth next year.
  • The Euro Area is expected to grow 3.1% this year and 0.5% next, while China is forecast to grow at 4.4% next year, followed by a projected 3.2 % this year.
  • “The three largest economies, the United States, China, and the euro area will continue to stall.
  • “Overall, this year’s shocks will re-open economic wounds that were only partially healed post-pandemic.
  • In short, the worst is yet to come and, for many people, 2023 will feel like a recession.”
  • There remain high downside risks to the forecasts, as per the IMF.
  • Monetary policy that seeks to restore price stability is the starting point to mitigating these risks.

Permanent change

  • “The energy crisis, especially in Europe, is not a transitory shock.
  • The geopolitical realignment of energy supplies in the wake of the war is broad and permanent,” adding that countries should target fiscal support towards the vulnerable via temporary transfers rather than focus on price controls, untargeted subsidies and export bans.
  • Emphasising that a large number of low-income countries, “too many”, are in or near debt distress, the chief economist urged orderly debt restructuring via the Group of Twenty (G20)’s Common Framework.


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