UNEXPECTEDLY RESILIENT

Strong fundamentals will prop up the Indian economy, despite global headwinds

India’s financial health is robust as compared to several other countries and it will be the fastest-growing major economy in the next fiscal (FY24), the International c Fund (IMF) said in its latest World Economic Outlook, pegging India’s GDP growth rate at 6.1%.

This healthy performance will be on the back of its oft-stated strong economic fundamentals and against the backdrop of global growth that is likely to decline from an estimated 3.4% in 2022 to below the 3%-mark at 2.9% in 2023.

With respect to a few other countries, it should be highlighted that Saudi Arabia, which is projected as the fastest-growing economy in 2022 at 8.7%, is expected to witness a slowdown to 2.6% this year.

 The United Kingdom could come under the grip of recession. The IMF projects a 0.6% slide in its GDP in 2023 while for the United States, its growth is estimated to slow down to 1.4% this year from the 2% of 2022.

 Significantly, however, the economy of India’s neighbour China is expected to do well in 2023. Its growth is estimated to move northward to 5.2% this year from the moderate 3% number of last year - this should make China happy.

 While the rapid spread of Covid-19 in China dampened growth in 2022, the recent re-opening has paved the way for a “faster-than-expected recovery”, it said.

INDIA: ECO  SURVEY 2022-22 ESTIMATES

The IMF has estimated India’s economic growth in FY24 at just above 6% at 6.1%. But the Indian government feels otherwise - it expects India’s GDP growth to be higher, at a very healthy 6.5%.