The International Monetary Fund cut India's growth forecast for FY23 as a fallout from Russia's invasion of Ukraine.
IMF projects India's GDP to grow at 8.2% in FY23, 0.8 percentage points lower than its projection in January, according to the World Economic Outlook for April 2022 published on Tuesday. GDP is estimated to grow 6.9% in FY24, 0.2 percentage points lower than what was projected previously.
"Notable downgrades to the 2022 forecast include Japan and India, reflecting in part weaker domestic demand—as higher oil prices are expected to weigh on private consumption and investment—and a drag from lower net exports," said the World Economic Outlook.
Economic damage from the war in Ukraine will contribute to a significant slowdown in global growth in 2022 and will add to inflation, the IMF said. Fuel and food prices have increased, hitting vulnerable populations in low-income countries hardest, it said.
Global growth is projected to slow from an estimated 6.1% in 2021 to 3.6% in 2022 and 2023. This is 0.8 and 0.2 percentage points lower for 2022 and 2023, respectively, than projected in January.
Beyond 2023, global growth is forecast to decline to about 3.3% over the medium term. War-induced commodity price increases and broadening price pressures have led to 2022 inflation projections of 5.7% in advanced economies and 8.7% in emerging market and developing economies—1.8 and 2.8 percentage points higher than projected in January, according to the IMF.
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