IMF cuts India's GDP forecast for FY22 to 9% from 9.5%

The IMF's forecast for the current financial year is less than 9.2 per cent that the government's Central Statistics Office has predicted and 9.5 per cent that the Reserve Bank of India has estimated. Its forecast is lower than the 9.5 per cent projection by S&P and 9.3 per cent by Moody's but more than the 8.3 per cent projection by the World Bank and 8.4 per cent by Fitch.

According to the IMF, India's prospects for 2023 are marked up on expected improvements to creditgrowth and, subsequently, investment and consumption, building on better-than-anticipated performance of the financial sector.

The IMF said that global growth is expected to moderate from 5.9 in 2021 to 4.4 per cent in 2022, half a percentage point lower for 2022 than in the October WEO, largely reflecting forecast markdowns in the two largest economies-the US and China.

The global growth is expected to slow to 3.8 per cent in 2023.In a blog post, IMF's chief economist Gita Gopinath wrote that the continuing global recovery faces multiple challenges as the pandemic enters its third year.The rapid spread of the Omicron variant has led to renewed mobility restrictions in many countries and increased labour shortages, she said.

Supply disruptions still weigh on activity and are contributing to higher inflation, adding to pressures from strong demand and elevated food and energy prices, Gopinath wrote.