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What is the News?
The International Monetary Fund(IMF) has released the World Economic Outlook Report.
What is the World Economic Outlook Report?
The report is published by the IMF twice a year: One each in April and October. It also provides updates to these two reports in January and July.
Aim: To provide analysis and forecasts of economic developments of member countries and highlight risks and uncertainty.
What are the key highlights from the report?
Global Growth:
Global growth is projected to slow down from an estimated 6.1% in 2021 to 3.6% in 2022 and 2023. This is 0.8 and 0.2% points lower for 2022 and 2023 than in the January World Economic Outlook Update.
Reason: The downgrade is largely due to 1) the Russia-Ukraine war, 2) sanctions on Russia, 3) Sharper-than-anticipated deceleration in China, 4) renewed flare-up of the pandemic, 5) rising medium-term inflation expectations and 6) ongoing climate emergency.
Recommendations: Multilateral efforts to respond to the humanitarian crisis, prevent further economic fragmentation, maintain global liquidity, manage debt distress, tackle climate change and end the pandemic are essential.
India: IMF has slashed the growth forecast for India for the current financial year by 80 basis points to 8.2%.
With import bills rising due to high commodity and fuel prices, the IMF estimates India’s current account deficit to widen to 3.1% in FY 2022-23 from 1.6% in FY 2021-22.
Additionally, deceleration in global growth would also lead to lower demand for Indian exports.
Source: The post is based on the article “World Economic Outlook: Downward revision cycle for global economic outlook has begun” published in Financial Express on 27th April 2022.
