International Monetary Fund i.e. IMF has reduced India’s GDP growth forecast for FY24 by 20 bps i.e. 0.20%. IMF has projected India’s GDP to grow at 5.9% for FY24. Earlier, the IMF had expected the GDP to grow at a rate of 6.1%.

This IMF forecast is much lower than the Reserve Bank of India’s (RBI) estimate of 6.5% for FY24. At the same time, according to the IMF, it has grown at a speed of 6.8% in FY23. Talking about inflation, IMF expects India’s retail inflation to be 4.9% in FY24 and 4.4% in FY25.

In the meeting of the Monetary Policy Committee held this month, the RBI did not make any change in the interest rates. Governor Shaktikanta Das had said, to maintain the ongoing recovery in the economy, we have not made any change in the policy rate, but if needed, we will take steps according to the situation. India’s economy remains strong amid all the global tensions.

RBI released this estimate after the monetary policy meeting.

Global economy growth forecast reduced
Earlier this year, economists and corporate leaders expressed hope that there would not be much of a slowdown in global economic growth. This expectation was expressed due to the reduction in energy prices since the opening of China’s economy.

But the banking sector crisis that emerged last month has changed everything. In such a situation, the IMF has reduced the forecast of the global economy. The IMF expects growth to slow from 3.4% in 2022 to 2.8% in 2023. In January, the IMF had estimated a growth of 2.9%.

IMF did not change China’s GDP growth forecast

The monetary policy of central banks affected the most.
The IMF said that the monetary policy of the Central Banks has affected the most to prevent inflation in the year 2022. However, the rate of inflation has come down due to the increase in interest rates. Along with this, the weaknesses of the banking sector have also been exposed.

Know what the inflation figures of India say?

1. Retail inflation 6.44% in February
Retail inflation in the country has come down to 6.44% in the month of February. In January 2023, it was at a three-month high of 6.52% and in December 2022 at 5.72%. Three months ago in November 2022, retail inflation was 5.88%. Last year in February 2022 it was 6.07%.

2. The wholesale inflation rate stood at 3.85%
The Wholesale Inflation Rate (WPI) has come down to 3.85% in February. This is the lowest level in 25 months. The wholesale inflation rate in January 2023 was 4.73%. In December, the wholesale inflation rate was 4.95%. Due to the cheapness of items like potato, onion, fuel, there has been a decline in inflation.

How does inflation affect?
Inflation is directly related to purchasing power. For example, if the inflation rate is 7%, then Rs 100 earned will be worth only Rs 93. Therefore, one should invest keeping in view the inflation. Otherwise the value of your money will decrease.