International Monetary Fund (IMF) on Tuesday raised India's GDP projection marginally by 0.2 per cent to 6.3 per cent even as it slashed the global growth forecast to 3 per cent.
IMF in July had estimated India's GDP forecast at 6.1 per cent for 2023-24. However, this is lower than the RBI's latest estimate of 6.5 per cent for the current financial year.
However, India's growth is projected to be higher than China's, the second-largest economy in the world.
IMF's 'World Economic Outlook' revised China's growth forecast downward by 0.2 percentage points for 2023 and by 0.3 percentage points for 2024 to 5 per cent and 4.2 per cent, respectively.
With the property market crisis in that country, lower investment is the main contributor to the revision, it said.
"Growth in India is projected to remain strong, at 6.3 per cent in both 2023 and 2024, with an upward revision of 0.2 percentage point for 2023, reflecting stronger-than-expected consumption during April-June," the 'World Economic Outlook' said.
Monetary policy projections are consistent with achieving the Reserve Bank of India's inflation target over the medium term, it noted.
The government has mandated the RBI to keep CPI inflation at 4 per cent with a margin of 2 per cent on either side.
Observing that the food security concerns prompted recent export restrictions in the world’s largest rice exporter India, it said, risks to prices are tilted to the upside, stemming mostly from the ramifications of the end of the Black Sea Grain Initiative and
uncertain effects of El Nino, possibly exacerbated by the proliferation of food export restrictions.
On the oil import, it said about 35 to 40 per cent of India's crude oil imports came from Russia during April-June 2023, a stark rise from less than 5 per cent before the war in Ukraine.
"While India's oil exports (mostly petroleum products) are small relative to its oil imports (mostly crude oil), India increased its oil exports to the European Union substantially," it said.
Last week, the World Bank retained India's growth forecast at 6.3 per cent for the current financial year on the back of robust service activities despite global headwinds.
In India, which accounts for the bulk of the South Asia region, growth is expected to remain robust at 6.3 per cent in 2023-24, India Development Update of the World Bank said.
The World Bank had projected 6.3 per cent GDP growth in its April report as well. India recorded 7.2 per cent growth in 2022-23.
Last month, Asian Development Bank (ADB) marginally lowered India's growth forecast to 6.3 per cent for the current financial year.
The Organisation for Economic Cooperation and Development (OECD) in its latest report upped the GDP growth projection for India to 6.3 per cent from the previous estimate of 6 per cent.