IMF: India to be fastest growing major economy in 2023

The International Monetary Fund raised its 2023 growth forecast for India by 20 basis points to 6.1%, bolstering expectations that the current G20 chair will be the world’s fastest growing major economy this year, CNBC informs.

In its July update to its World Economic Outlook, the IMF said Tuesday its revision was guided by stronger growth in the fourth-quarter last year, powered by domestic investment. Its 2024 projection for 6.3% growth in India stayed unchanged from its April projection.

The forecasts underscore India’s emergence as a bright spot for global growth. This comes as China’s star wanes and Beijing seeks to reflate faltering growth momentum, while staying the course in its bid to rebalance the world’s second-largest economy.

Still, the IMF expects China to grow by 5.2% this year and 4.5% next year.

The IMF expects India and China to drive growth in emerging and developing Asia, which it projects to grow 5.3% this year and 5% next year — it downgraded its 2024 regional forecast by 0.1 percentage point.

The IMF raised its 2023 global growth prediction by 0.2 percentage point to 3%, up from 2.8% in its April assessment. The figure highlights concerns over tighter credit conditions, depleted household savings in the U.S. and a shallower-than-expected economic recovery in China from strict Covid-19 lockdowns. The IMF kept its 2024 growth forecast unchanged at 3%.

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