Amidst the global recession threat, the International Monetary Fund (IMF) on Tuesday slashed India’s growth by 80 basis points to 7.4 per cent for 2022-23, attributing it to policy tightening by the Reserve Bank of India (RBI) and external conditions.
In its earlier estimates, the IMF had said that India is projected to grow at 8.2 per cent, which is a sharp decline in its economic outlook for 2022-2023. The IMF, which released its World Economic Outlook report on Tuesday, said that for India, the revision reflects mainly less favourable external conditions and more rapid policy tightening.
IMF Chief Economist Pierre-Olivier Gourinchas said: “Tighter monetary policy will inevitably have real economic costs, but delaying it will only exacerbate the hardship. Central banks that have started tightening should stay the course until inflation is tamed.”
Even after cutting the growth forecast, the IMF said the Indian economy will remain one of the fastest growing key economies in the world in FY23 and FY24.
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