NEW DELHI: In an upward revision, the International Monetary Fund (IMF) has projected a growth rate of 6.1 per cent for India in 2023, which is a 0.2 percentage point upward revision compared with the April projection. 

The IMF's growth prediction is however quite lower than the Reserve Bank of India's projection of a 6.5 per cent rise in the country's growth rate. In the last fiscal year that ended on March 31, 2022, India's growth stood at an impressive 7.2%, positioning it among the top-performing economies globally.

IMF said that this was reflective of the momentum from stronger-than-expected growth in the fourth quarter of 2022 which was a result of stronger domestic investment.

In its latest update report of the World Economic Outlook, the report said that global growth is projected to fall from an estimated 3.5 per cent in 2022 to 3 per cent in both 2023 and 2024 while the global headline inflation is expected to fall from 8.7 per cent in 2022 to 6.8 per cent in 2023 and 5.2 per cent in 2024, it said.

IMF said that underlying (core) inflation is projected to decline more gradually, and forecasts for inflation in 2024 have been revised upward, however, the report has also cautioned about persistent challenges that could dampen the medium-term outlook and has said that inflation could remain high and even rise if further shocks occur, including those from an intensification of the war in Ukraine and extreme weather-related events, triggering more restrictive monetary policy, the report said.

The IMF said the recent resolution of the US debt ceiling standoff and, earlier this year, strong action by authorities to contain turbulence in the US and Swiss banking, reduced the immediate risks of financial sector turmoil. For the US, the IMF raised its growth forecast for this year to 1.8 per cent, up 0.2 percentage points from April. 

The increase was attributed to resilient consumption growth in the first quarter, supported by a still-tight labour market, higher real income, and a rebound in vehicle purchases.

Regarding China, the IMF said that China's recovery could slow, in part as a result of unresolved real estate problems, with negative cross-border spillovers, and thus it maintained its forecast at 5.2 per cent, but highlighted a change in composition due to the underperformance of investment, primarily due to issues in the country's troubled real estate sector.