Why has IMF downgraded India’s growth outlook for FY23?

The International Monetary Fund (IMF) In its latest Outlook for the World Economy, has downsized the growth for India and for the world economy. For instance, the global GDP growth for 2022 has been cut by 80 bps from 4.40% to 3.60%, while India GDP growth estimates are also cut by 80 bps to 8.20%.

The key trigger, of course, is Russia's war in Ukraine and the consequent supply chain bottlenecks, global trade disruption, steep oil prices and real risks to food security. IMF is also fairly concerned that the biggest incremental contributor to global growth, China, is struggling with a COVID lockdowns. Russian economy is likely to shrink by -8.5%.