Why is it in the news?
- Recently, the International Monetary Fund (IMF) has released its World Economic Outlook 2023 titled- Navigating Global Divergence, which stated that the Indian Economy will grow faster than previously estimated.
Key highlights of the Report
- Global GDP growth is forecasted at 3% for 2023 and 2.9% for 2024.
- Global inflation is anticipated to rise to 5.8% in 2024, reflecting tighter monetary policies.
- Investment remains below pre-pandemic levels due to higher interest rates and stricter lending conditions.
- China’s economy is expected to grow by 5% in 2023 but has seen a slight reduction in growth forecasts for 2023 and 2024 compared to July projections.
- India’s GDP growth for 2023-24 is projected at 6.3%, with a similar forecast for 2024-25.
- Concerns include tight monetary policies, an uneven pandemic recovery, and supply chain disruptions due to Russia’s invasion of Ukraine.
- Countries are advised to rebuild fiscal buffers against future shocks.
- The IMF recommends encouraging business investment, monitoring economic divergence, and exercising caution in managing inflation and monetary policy.
· The IMF is an international organization with a mission to promote global economic growth, ensure financial stability, facilitate international trade, and reduce poverty.
· Established in 1945 during the Bretton Woods conference, its primary initial objective was to coordinate international economic policies to prevent competitive currency devaluations aimed at boosting exports.
· Over time, the IMF evolved into a lender of last resort, providing financial assistance to countries facing severe currency crises and economic challenges.
· The IMF produces reports to assess and analyze global economic and financial conditions, including the Global Financial Stability Report and the World Economic Outlook.