India growth may moderate to 6.1% in FY24, IMF says
Live MintIndia’s economic growth is expected to moderate to 6.1% in FY24 from 6.8% estimated for the current fiscal because of high oil prices, weaker external demand, and tighter financial conditions, the International Monetary Fund said in its report released on Friday. Growth expectations “The war in Ukraine and sanctions on Russia continue to impact the Indian economy through multiple channels, including elevated commodity prices, lower external demand, and uncertainty-driven adverse confidence effects,” said the Article IV Consultation report, which is based on IMF’s bilateral discussions with the Indian authorities. The IMF cautioned that the risk of second-round effects from fuel and commodity price shocks remains high even as India’s long-term inflation expectations remain relatively well anchored. Projecting India’s inflation at 6.9% in 2022-23, the multilateral agency said that it will gradually return to within the Reserve Bank of India’s tolerance bank of 4-6% next year, “reflecting favourable base effects, the impact of monetary policy tightening, and well-anchored long-term inflation expectations.” India’s retail inflation moderated to 5.88% in November, easing below RBI’s upper tolerance limit of 6% for the first time this year.