India's Economy Projected To Expand At 6.3 Per Cent In Current Fiscal Year: IMF

The IMF's growth projection for the current financial year, ending March 31, 2024, is lower than the 7 per cent forecast by the Reserve Bank of India

The RBI recently recently upgraded India's GDP growth rate projection for the current financial year to 7 per cent. ( Image Source :Getty )

The International Monetary Fund (IMF) on Monday said that India's economy is estimated to expand at 6.3 per cent in the current fiscal year and the next on the back of macroeconomic and financial stability. According to IMF, India's digital public infrastructure and a strong government infrastructure programme will continue to sustain growth. In its Article IV consultation report, which reviews a country's current and medium-term economic outlook, IMF said, "India has potential for even higher growth, with greater contributions from labour and human capital, if comprehensive reforms are implemented."

The IMF's growth projection for the current financial year, ending March 31, 2024, is lower than the 7 per cent forecast by the Reserve Bank of India (RBI).

The central bank recently upgraded India's GDP growth rate projection for the current financial year to 7 per cent. Announcing the decisions taken in the Monetary Policy Committee’s (MPC) bi-monthly review meeting, RBI Governor Shaktikanta Das gave a revised GDP growth estimate for FY24, up from the earlier projection of 6.5 per cent. The revision was attributed to the robust domestic demand and improved capacity utilisation in the manufacturing sector. 

As per IMF, "Headline inflation is expected to gradually decline to the target although it remains volatile due to food price shocks." 

Volatile food prices pushed up retail inflation to 5.55 per cent in November from 4.87 per cent the previous month. While this was within the RBI's tolerance level of 2 per cent-6 per cent, it remains above the target of 4 per cent. 

On the other hand, Indian rating agency ICRA on Monday also gave a revised GDP growth forecast for India for the current fiscal year. The domestic rating agency upgraded its growth forecast for the 2023-24 fiscal year (FY24) to 6.5 per cent, from its earlier estimate of 6.2 per cent.