IMF forecast India`s economic growth to 9%

Context

• Recently, IMF has forecasted India's economic growth rate to 9% for the current Fiscal year 2022 downgraded from last year's growth projection of 9.5%.

News Highlights

• IMF has pot the forecast for the next fiscal year 2023 for India at 7.1 percent in its latest update of the World Economy Outlook.
• The Indian economy has shown a contraction of 7.3% in the 2020-21 fiscal year.
• This IMF speculation for the current fiscal is less than 9.2 percent that the CSO has predicted and 9.5 percent that the Reserve bank of India(RBI) has estimated.
• Also downgraded from the 9.5 percent projection by S&P and 9.3 percent by Moody.
• Its forecast is more than the 8.3 percent projection by the World Bank and 8.4 percent by Fitch.
• IMF has also predicted the global growth rate moderation from 5.9 percent in 2021 to 4.4 percent in 2022.

International Monetary Fund (IMF)

Background

• IMF is an international financial institution formed in 1944 at the Bretton wood conference with the ideas of Harry Dexter White and John Maynard Keynes.
• It came into formal existence with 44 founding member countries.
• At present, its membership embraces 190 countries.
• Its headquarter is located in Washington, D.C, USA.

Objectives

Its been created with the following objective

• To foster global monetary cooperation 
• Secure financial stability,
• To facilitate international trade,
• promote high employment and sustainable economic growth and 
• To reduce poverty around the world
• It plays a vital role in the management of balance of payment difficulties and international financial crises.
• It provides loans including emergency loans to member countries to help them in rebuilding their international reserves, stabilize their currencies, and restoring conditions for strong economic growth, etc.
• It publishes the World economic outlook report annually.

Structure and financing

• It is governed by a Board of governors followed by a 24 member Executive Board which oversees the day-to-day activity of the board.
• IMF staff and the chair of the Executive Board headed by the Managing Director assisted by four Deputy Managing directors.
• The current MD of IMF is Kristalina Georgieves.Gita Gopinath became the first current Indian -American deputy MD of IMF.
• Its resources are financed by the Quota - the sum of money contributed by the member nations. This quote is revived every five years based on the country`s wealth and economic performance.
• India holds 2.75 percent of the SDR quota and 2.63 percent of votes in IMF.