Page 6 - Policy Economic Report - April 2023

Policy and Economic Report:
Oil & Gas Market

Economy in Focus

1. A snapshot of the global economy

Global economic growth
• IMF has projected the global growth to fall from 3.4% in FY 2022-23 to 2.8% for the current year
FY 2023-24 and at 3% for FY 2024-25.

• Many factors such as the global shocks emanating due to Russian-Ukraine war crisis as well as the
recent financial sector turmoil within the banking sector has translated into this global economic
slowdown, as per IMF.

• Further, the simultaneous policy rate hikes across countries have contractionary monetary effects
that provides policymakers limited policy space to offset the negative shocks.

• For advanced economies, due to unexpected failure of specialized banks in the US, growth is
projected to decline from 2.7% in 2022 to 1.3% in 2023, before rising to 1.4 % in 2024. In the euro
area and the United Kingdom, growth is expected to fall to 0.7 % and –0.4 %, respectively, this
year before rebounding to 1.8% and 2.0 % in 2024, while the U.S growth is projected at 1.6% for
FY 2023-24.

• The emerging market and developing economies are already powering ahead in many cases, due
to a rebound in Chinese economy; with growth rates jumping from 2.8 % in 2022 to 3.9 % this
year and 4.2% in 2024. According to IMF, India’s growth is projected to moderate to around 5.9%
in FY 2023-24, making it the fastest-growing economy in the world and then grow at 6.3% in FY
2024-25.

• IMF expects the global economy’s gradual recovery from both the pandemic and Russia-Ukraine
war crisis. Further, the synchronized tightening of monetary policy by most central banks should
start to show results, with inflation expected to move back towards targets.

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