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India and China to contribute half of global growth : IMF

WASHINGTON: India’s economic growth in the current financial year is resilient and, together with the recovery in China, will power a 4.6% growth in Asia, up from 3.8% in the year before, the Washington-based International Monetary Fund said in itsregionaleconomicoutlook.

In its “Regional Economic Outlook – Asia and Pacific” report released on May 2, International Monetary Fund said the region would contribute around70%ofglobalgrowth.“Asiaand Pacific will be the most dynamic of the world’s major regions in 2023, predominantly driven by the buoyant outlook for China and India,” the IMF reportsaid,addingthatthetwolargest emerging market economies of the region are expected to contribute around half of global growth this year, with the rest of Asia and Pacific contributinganadditionalfifth.

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Growth in the dynamic AsiaPacific region is projected to increase to 4.6% this year from the 3.8% recorded in 2022, according to the International Monetary Fund which stated that the growth will be largely ledbyIndiaandChina

“We project the region will contribute around 70% of global growth this year as its expansion accelerates to 4.6% from 3.8% in last year,” the multilateral agency said, adding that China’s reopening will provide a fresh momentum. That is a 0.3 percentage point upgrade from its Octoberoutlook.

The Chinese economy is expected to expand by 5.2% in 2023 in the wake of a strong recovery in private consumption amid rapid economic reopening.

India’s official forecast for FY24 is 6.5% expansion. Late last month, the finance ministry flagged downside risks to the official forecast arising from oil production cuts by OPEC, troubles in the financial sector in developed markets hitting cash flows and deficient monsoon rains from El Nino which could impact farm output andprices.

The IMF’s 5.9% growth projection forIndiaforthecurrentfiscalmadein Aprilisadowngradeof0.2percentage points from its January estimate, owing to turmoil in the financial system which in turn will likely hurt globalgrowth.

India’s economy is expected to have grown at 7% in FY23. Officials also expect cleaner balance sheets of companies and banks would aid a recoveryinprivateinvestment.

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