The International Monetary Fund on Tuesday cut its projection for India’s economic growth for 2022-’23 to 6.8% from July’s forecast of 7.4%.

In its World Economic Outlook report, the financial institution cited Russia-Ukraine conflict and rising inflation as the reasons behinds its revision.

“World’s 3 largest economies – US, China & the euro area – will continue to stall...We expect global inflation to peak at 9.5% this year before slowing to 4.1% by 2024,” the report stated.

International Monetary Fund Chief Economist Pierre-Olivier Gourinchas at a press conference said that India has been doing very well in 2022 and is expected to grow robustly in 2023, PTI reported.

“We expect a growth rate at 6.8 per cent for this year, and the projection for the country is 6.1 per cent for the next year,” Gourinchas said.

He added that the inflation is still above the central bank target, which aims to keep it between 2% and 6%. Currently, India’s inflation stands at 6.9%.

The chief economist predicted thatt he inflation will come down to 5.1%.

The financial institution also revised the global growth estimate to 3.2% in 2022 from 6% in 2021. It will further slip to 2.7% in 2023, the International Monetary Fund said.

This is the weakest growth profile since 2001, except for the global financial crisis and the acute phase of the Covid-19 pandemic.

The worst is yet to come: IMF

More than a third of the global economy will contract in 2023 according to the latest report by the International Monetary Fund. “This year’s shocks will re-open economic wounds that were only partially healed post-pandemic,” said IMF Chief Economist Pierre-Olivier Gourinchas. “In short, the worst is yet to come and, for many people, 2023 will feel like a recession.”

The economist noted that Russia’s invasion of Ukraine is one of the major factors that is destabilising the global economy, which has further led to a severe energy crisis in Europe that is sharply increasing the costs of living and hampering economic activity.

Gourinchas said that global inflation is now expected to peak at 9.5% this year before decelerating to 4.1% by 2024. He also noted that the effects of inflation will spread beyond food and energy. The economist added that central banks should remain focused to bring down soaring inflation.

“The risk of monetary, fiscal or financial policy mis-calibration has risen sharply at a time when the world economy remains historically fragile and financial markets are showing signs of stress,” he wrote.

The International Monetary Fund has also urged countries to formulate climate policies to address a larger issue.

“The energy and food crises, coupled with extreme summer temperatures, are stark reminders of what an uncontrolled climate transition would look like,” Gourinchas said. “Progress on climate policies, as well as on debt resolution and other targeted multilateral issues, will prove that a focused multilateralism can, indeed, achieve progress for all and succeed in overcoming geo-economic fragmentation pressures.”