IMF’s estimate of India’s growth rate is wrong, Reserve Bank has this objection

In the midst of an uncertain global environment, many organizations have reduced India’s economic growth rate estimates recently. These organizations also include the International Monetary Fund (IMF). IMF has reduced India’s economic growth forecast for 2023 to less than 6 percent now. The Reserve Bank (RBI) has raised objections to this estimate of the International Monetary Fund and said that some mistakes are possible in it.

Figures will be better than expected

The Reserve Bank has said these things in its latest State of the Economy Report (RBI State of the Economy Report). The Reserve Bank says that many multilateral organizations have made mistakes in estimating India’s economic growth rate. The Central Bank has specifically named the IMF. RBI says… It is too early to say, but the latest data indicates that many multilateral organizations, especially the IMF, may face errors in forecasting. The actual figures may positively surprise them. To put it in other words, the Reserve Bank believes that when the actual figures of GDP Growth Rate come out, they can be much better than the IMF’s estimates.

This is the estimate of IMF

The International Monetary Fund has reduced India’s economic growth forecast for 2023 from 6.1 percent to 5.9 percent. For this, the IMF has cited domestic consumption and challenging external conditions. In its annual World Economic Outlook, the IMF has also reduced the growth forecast for the financial year 2024-25 to 6.3 percent. Earlier in January, the IMF had said that India can grow at the rate of 6.8 per cent in the financial year 2024-25.

RBI made this estimate

At the same time, RBI believes that the pace of growth of India’s economy will be low, but it will not go below 6 percent. The Reserve Bank claims that India’s growth rate can be 7 percent in the financial year 2022-23. At the same time, regarding the new financial year started from April 1, RBI estimates that during this period India’s GDP can grow at the rate of 6.4 percent.

The Reserve Bank is confident that

The Reserve Bank is confident that India will continue to be one of the fastest growing major economies of the world. The Reserve Bank also claims that India’s contribution to global economic growth is going to be more than the contributions of the United States and the European Union combined. According to RBI, India alone will contribute 15 percent to the global growth.

El Nino may be at risk

The Central Bank has also given arguments to provide a solid basis for this point. According to the Central Bank, overall demand conditions in India have remained strong so far. Urban demand has grown rapidly. Rural demand indicators are improving steadily. The expectations of a bumper Rabi crop have further strengthened it. However, there is some threat to growth from El Nino.

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