UNITED NATIONS: India’s economy is projected to grow by 9 per cent in the next financial year (FY23), retaining its position as the fastest-growing major economy, the International Monetary Fund (IMF) reported on Tuesday citing its expectations of higher investments and consumption due to credit growth and better financial sector performance. The IMF’s World Economic Outlook (WEO) Update released in Washington said that India’s gross domestic product (GDP) is projected to again increase next fiscal by another 9 per cent, before moderating to 7.1 per cent in 2023-24.

The Update raised the growth projection for the current fiscal by 0.5 per cent from the 8.5 per cent projected in its WEO released in October last year. “India’s prospects for 2023 are marked up on expected improvements to credit growth—and, subsequently, investment and consumption—building on better-than-anticipated performance of the financial sector,” the report said. The upward revision is unrelated to the Covid-19 developments, it said. India and Japan are the only major economies to have their growth projections raised from that made in October last. Japan’s growth projection was increased by only 0.1 per cent from 3.2 per cent in October to 3.3 per cent. Even though the report lowered India’s growth estimate for the current fiscal to 8.5 per cent from October’s 9 per cent, the country will still be the global growth leader.

This WEO Update is the last directly overseen by Gita Gopinath as the IMF’s economic counselor and director of its research department. She was promoted to the No. 2 spot at the IMF as its First Deputy Managing Director last week. In a blog accompanying the Update, Gopinath sounded optimistic about the future with Covid variant Omicron’s effects likely receding in the second quarter of this year.