The International Monetary Fund (IMF) on July 26 cut its annual growth projection for India by 0.8 percentage points to 7.4 percent for 2022 and forecast "increasingly gloomy developments" for the international economy such as high inflation, downturn in China because of Covid-19 and spillovers from the war in Ukraine.

"Several shocks have hit a global economy already weakened by the pandemic: higher-than-expected inflation worldwide, especially in the United States and major European economies, triggering tighter financial conditions; a worse-than-expected  slowdown in China, reflecting COVID-19 outbreaks and lockdowns; and further negative spillovers from the war in Ukraine," the IMF  said in the latest economic outlook.

The fund cut its 2023 projection for India also by 0.8 percentage points to 6.1 percent. These revised forecasts are relative to those in the fund's April world outlook report. The 2022 cut for India "reflects mainly less favorable external conditions and more rapid policy tightening", said the fund's World Economic Outlook Update, titled "Gloomy and More Uncertain". The World Bank has also cut its projections for India to 7.5 percent from 8 percent for 2022-23, blaming it on a surge in Covid-19 cases, related mobility restrictions and the war in Ukraine.

The multilateral lender noted that after a tentative recovery in 2021, the economic outlook has turned gloomy and uncertain, with the probability of a global recession.

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