IMF trims FY22 India growth forecast to 9.5%

The International Monetary Fund (IMF) slashed the forecast for India with respect to the FY22 growth by 300 basis points to 9.5%, the main reason for which is the surge in the second wave of COVID and the rapid increase in the cases across the country. The sharpest cut for any country.

Although, the projections for the next fiscal year have raised the growth of the country to 8.5% from 6.9 without taking into account the second wave and the increase in the COVID cases.

The multilateral body retained its global growth forecast at 6% for 2021, the base points for the developing countries have been trimmed by 40 bps and for the developed countries it was raised by 50 bps. Vaccination also has an impact on the same, such that the slower pace of the vaccination drive in countries like India and Indonesia is bound to be impacted the most among G20 economies.

The IMF also revised up its predictions of global trade volume growth by a sharp 130 bps for 2021 to 9.7% and 50 bps for 2022 to 7%. On a positive note, India is expected to get benefitted from a rise in global trade prospects once its supply side is fully functional.

Source: Financial Express