IMF warns on global economy: 'Worst time is yet to come' on India and there is a huge cut in growth

international monetary fund

Newz Fast, New Delhi: Economic contraction is projected in one third of the world. The IMF has also drastically reduced India's growth forecast.

The International Monetary Fund (IMF) has predicted the global economy to go through a tough phase in the year 2023. It has lowered forecasts of economic growth and forecast economic contraction in a third of the world.

In its growth forecast projection, the IMF has lowered India's GDP estimate to 6.8 percent. In this way, the IMF has cut it drastically by 0.6 percent.

In the latest estimates released, the International Monetary Fund (IMF) on Tuesday slashed India's economic growth forecast for 2022 to 6.8%. This is a massive cut compared to its previous forecast of 7.4%, which it gave in July.

In its latest annual World Economic Outlook report released by the IMF, there are clear indications of weaker-than-expected results in the second quarter and a slowdown in external demand.

The fund has projected India to grow at a rate of 6.1% for the next year 2023. Last week, the World Bank also slashed India's growth forecast for the fiscal year 2022-23 to 6.5%, which is 1% lower than its previous June 2022 estimate.

On a global scale

In its latest forecast, the global financial institution's World Economic Outlook report said, "The worst is yet to come. The year 2023 will feel like a massive recession."

Thus, while revising projections from negative Russia, the IMF has shown a decline by revising global growth rates for 2023 from the rate expected in July.

The forecast expects a growth rate of only 2.7 per cent at the next global level. This is significantly lower than last year's growth of 6 per cent and this year's growth of 3.2 per cent.

Weakest growth forecast since 2001

The IMF said this is the 'weakest growth profile' since 2001, excluding the COVID-19 pandemic and the acute fallout phase of the global financial crisis.

This marks a 'significant slowdown' for the largest economies, as the US gross domestic product (GDP) contracted in the first half of 2022, followed by a contraction of the euro area in the second half of 2022 and a prolonged Covid-19 outbreak in China. There has been an outbreak and lockdown of -19.

"The world is in a volatile phase: economic, geopolitical and ecological changes all affect the global outlook for economic growth," the report said.

According to the report, almost a third of the world economy is facing negative growth for two consecutive quarters, the IMF has also predicted the same.

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