印度宏觀經(jīng)濟表現(xiàn)-英

85th

issueEconomyWatchMonitoring

India’smacro-fiscalperformanceNovember

2023ENTERHomeContentsForeword:Budgetingfor

FY25:from

InterimtoMainBudget4123456789Growth:PMIindicatedaneasingof

growthinmanufacturingandservicesinOctober2023Inflation:CPIinflationeasedto

afour-month

lowof4.9%in

October2023Fiscal:GoI’s

capitalexpendituregrowthstood

at

43.1%

during1HFY24Comparative

trends:IMFprojectedIndia’sgovernment

debt-GDPratioat

82%inFY24In

focus:Economicandfiscaloutlookfor

FY25’s

Interim

Budget67810111719202122Moneyandfinance:bankcredit

grewby15.3%in

September2023Trade

andCAB:merchandise

exportsandimportsgrowthturnedpositive

in

October2023Global

growth:IMFprojectedglobal

growthat

3%

in2023and2.9%in2024IndexofAggregateDemand(IAD):grewby12.2%inSeptember202310

Capturingmacro-fiscaltrends:dataappendixPrepared

by

Macro-fiscal

Unit,

Tax

and

Economic

Policy

Group,

EY

IndiaD.K.Srivastava,ChiefPolicyAdvisor,EY:dk.srivastava@MuralikrishnaBharadwaj,

SeniorManager,EY:muralikrishna.b@TarrungKapur,SeniorManager,EY:tarrung.kapur@RaginiTrehan,Senior

Manager,EY:ragini.trehan@Highlights1.InOctober2023,bothmanufacturingandservicesPMIremainedathighlevelsof55.5and58.5respectively,althoughtheirratesofexpansiondecelerated.2.3.Ledbyabroad-basedimprovementintheoutput

of

keysub-industries,IIPgrowthincreasedto7.4%in

2QFY24from4.8%in1QFY24.CPI

inflationmoderatedto

4.9%inOctober2023from5.0%inSeptember2023,inchingclosertothe

RBI’s4%target.CoreCPI

inflationeasedforthefourthsuccessivemonthto4.3%inOctober2023.4.TheWPI

reflectedacontractioninpricesatthewholesalelevelfortheseventhsuccessivemonthat(-)0.5%inOctober2023ascomparedto(-)0.3%inSeptember2023,ledbyfavorablebaseeffects.5.6.7.8.9.During1HFY24,GoI’sgrosstaxrevenues(GTR)showedagrowthof16.3%,withgrowthindirecttaxesat25.4%andthatinindirecttaxesat6.5%.GoI’stotalexpendituregrewby16.2%during1HFY24,withgrowthincapitalexpenditureat43.1%andthatinrevenueexpenditure

at10%.During1HFY24,GoI’sfiscalandrevenuedeficits,asaproportionoftheirannualBE,stoodat39.3%

and26.6%,respectively.Growthingrossbankcreditincreasedtoathree-monthhighof

15.3%inSeptember2023from14.9%

inAugust2023.Growthinmerchandiseexportsandimportsturnedpositiveat6.2%and12.3%inOctober2023aftershowingacontractionfortensuccessivemonths,partlyduetofavorablebaseeffect.10.

Merchandisetradedeficitsurgedtoanunprecedentedhighof

US$31.5billioninOctober2023fromafive-monthlowofUS$19.4billioninSeptember2023.11.

NetFDIsturnedpositiveinSeptember2023withinflowsamountingtoUS$1.5billionascomparedtooutflowsofUS$2.8billioninAugust2023.12.

Froma13-monthhighlevelofUS$92.2/bbl.inSeptember2023,globalcrudeprice

moderatedtoUS$89.1/bbl.inOctober2023asglobalsupplyconcernseasedwithanincreaseintheOPECoutput.However,theongoinggeopoliticalconflictintheMiddleEastposessignificantupsideriskstoglobalcrudepricesinthenearterm.13.

TheIMF

hasprojectedglobalgrowthat3%in2023,withIndia’sFY24growthforecastedat6.3%.EconomyWatch:November2023|

3HomeForewordBudgeting

for

FY25:

from

interim

to

main

budgetThe

union

government

will

present

an

Interim

Budget

for

FY25

on

1

February

2024.

The

main

Budget

would

bepresented

after

the

general

elections

in

May

2024.

In

2019,

when

a

similar

situation

had

arisen,

the

main

Budget

waspresented

in

the

first

week

of

July.

The

Interim

Budget,

also

called

a

Vote

on

Account,

enables

undertaking

ofexpenditures

at

the

beginning

of

the

next

fiscal

year

until

the

main

Budget

is

presented.

It

is

not

used

for

the

initiationof

any

majorpolicychanges.

The

Interim

Budget

therefore

is

of

interest

to

the

extent

as

it

provides

an

assessment

ofthe

economy

and

its

fiscal

health.

One

key

variable

of

interest

would

be

the

achieved

improvement

in

indicators

offiscal

imbalance,

such

as

fiscal

and

revenue

deficits

and

government

debt

relative

to

GDP

after

their

sharp

departuresin

the

COVID-affected

year

of

FY21.

Using

this

assessment

and

considering

more

up-to-date

information,

the

mainBudgetwillprovideanoccasiontoinitiatepolicyreformsinalonger-termperspective.As

per

the

National

Statistical

Organization

(NSO),

real

and

nominal

GDP

growth

in

1QFY24

turned

out

to

be

7.8%and8%respectively.TheGVAdataindicatedthat

manufacturinggrowth

remainedrelativelylowat4.7%in1QFY24,partly

reflecting

the

effectof

the

global

economic

slowdown.

Within

services,

although

the

quarterly

real

growth

(y-o-y)

of

the

trade,

hotels,

transport,

communication,

and

storage

sector

was

9.2%

in

1QFY24,

its

magnitude

(in

2011-12

prices)

was

lower

by

2%

as

compared

to

the

corresponding

magnitude

in

the

first

quarter

of

the

pre-COVID

yearof

FY20.ThispatternhasbeenreplicatedforthefirstquarterofFY22,FY23

andFY24.

Thismightindicatethatthisemployment-intensive

sector

has

not

yet

fully

recovered

from

the

COVID

shock

and

continues

to

be

vulnerable

tosupplysidedisruptions.Theprospectsfor2QFY24growthappeartobe

atparifnotbetter,comparedto

theRBI’sestimateof6.5%.TheRBIGovernor,

in

a

recent

statement1,

showed

confidence

that

this

expectation

would

be

met

if

not

exceeded.

Recentmonthshaveseen

buoyanthighfrequencyindicators,justifying

thisoptimism.IIP

and

coreIIP

growthaveraged

7.4%and

9.7%

respectively

in

2QFY24,

gross

GST

collections

averaged

INR1.62

lakh

crore,

PMI

manufacturing

andservices

showed

high

levels

at

an

average

of

57.9

and

61.1

respectively,

bank

credit

growth

remained

strong

at

15%,and

power

consumption

growth

averaged

at

a

five-quarter

high

of

11.9%.

On

a

monthly

basis,

growth

in

powerconsumption

was

at

its

highest

level

since

May

2022

at

20.9%

in

October

2023.

Growth

in

gross

bank

credit

increasedto

a

three-month

high

of

15.3%

in

September

2023

from

14.9%

in

August

2023.

CPI

inflation

at

4.9%

in

October

2023reflected

a

moderation

for

the

third

successive

month

and

inched

closer

to

the

RBI’s

4%

target.

Core

CPI

inflationeasedforthefourthsuccessivemonthto4.3%inOctober2023.For

the

year

as

a

whole,

there

is

a

strong

likelihood

that

GDP

growth

may

turn

out

to

be

about

6.5%,

marginally

higherthan

the

IMF

and

World

Bank’s

projection

of

6.3%.

Some

of

the

risk

factors

that

India

may

still

need

to

consider

includedeficiency

and

the

uneven

spread

of

the

southwest

monsoon,

volatile

global

crude

prices,

and

some

supply

sidedisruptions

due

to

the

ongoing

geopolitical

conflicts.

It

is,

however,

definite

that

India

would

outperform

its

large

peereconomiesbyatangiblemargin.Based

on

available

information,

our

expectation

of

real

and

nominal

GDP

growth

rates

for

1HFY24

is7.2%and

8.5%respectively.

The

In-focus

section

of

this

issue

contains

a

detailed

analysis

of

the

fiscal

prospects

for

FY24,

which

willprovidethebasefortheFY25Budgetestimates.

Thebudgeted

fiscaldeficittoGDP

ratio

oftheGoIis5.9%

forFY24.There

might

be

an

increase

in

fertilizer

and

other

petroleum

linked

subsidies

due

to

higher

global

crude

prices.Considering

some

recent

estimates

of

additional

fertilizer

subsidies

to

the

extent

of

INR50,000

crore

and

using

thebudgeted

magnitude

of

nominal

GDP,

the

fiscal

deficit

to

GDP

ratio

may

increase

to

close

to

6.1%.

There

may

befurtherpressureon

this

numberduetoa

slippagein

nominalGDP

growth

and

anyshortfall

in

thebudgetedGTR.Thismay

be

reflected

in

FY24

RE.

In

FY25,

the

GoI

should

signal

a

movement

towards

the

stated

fiscal

deficit

target

of4.5%

of

GDP

in

FY26.

If

evenly

distributed,

this

would

imply

achieving

a

5.2%

fiscal

deficit

relative

to

GDP

in

FY25.The

medium-term

glide

path

should

pass

through

the

4.5%

target

in

FY26

and

spell

out

annual

reduction

targets

toachieve

the

norm

of

3%

of

GDP

latest

by

FY28.

This

should

at

least

be

spelt

out

in

the

main

Budget.

In

the

FY241.in/Scripts/BS_SpeechesView.aspx?Id=1392EconomyWatch:November2023|

4Budget,

the

medium-term

fiscal

policy

cum

fiscal

policy

strategy

statement

provided

estimated

magnitudes

of

fiscaldeficit

relative

to

GDP

for

only

two

years

covering

FY23

RE

and

FY24

BE.

The

practice

of

giving

an

estimated

glidepath

over

the

medium

term

as

provided

for

in

the

FRBM

Act

as

amended

in

2018

should

be

adhered

to.

The

Act

calledforproviding‘fiscalindicators-rollingtargets’fortwomoreyearsbeyondthebudgetyear.In

order

to

ensure

that

the

combined

fiscal

deficit

relative

to

GDP

is

brought

closer

to

6%,

GoI

may

considerconstituting

a

Loan

Council

to

oversee

the

annual

borrowing

programs

of

the

central

and

state

governments.

It

isalso

desirable

to

showabalance

on

revenue

account

and

reduction

of

government

debt-GDP

ratio.

This

isneeded

toaugment

the

aggregate

savings

rate

by

reducing

government

dissavings

so

that

the

medium-term

growth

can

besustained

at

close

to

7%.

In

the

medium-term,

government’s

emphasis

on

expanding

infrastructure

by

prioritizingcapital

expenditure

needs

to

be

retained.

Given

the

uncertainty

relating

to

global

crude

prices,

government’s

programto

shift

to

alternative

sources

of

supply

of

crude

and

the

use

of

alternative

fuels

should

be

accelerated.

To

encourageinvestment

into

and

adoption

of

the

latest

generation

of

digital

technologies,

including

Generative

AI,

the

GoI

mayconsiderexpandingthescopeand

magnitudeofPLI

schemesspeciallytodevelopsupportinghardware.D.K.

SrivastavaChief

Policy

Advisor,

EY

IndiaEconomyWatch:November2023|

5Home1

Growth:

PMI

indicated

an

easing

of

growth

in

manufacturingand

services

in

October

20231.1

PMI:

in

October

2023,

composite

PMI

output

index

at

58.4,

showed

its

weakest

rate

ofexpansion

since

March

2023?HeadlinemanufacturingPMI(seasonallyadjusted(sa))at55.5inOctober2023remainedabovethethresholdlevelof50forthe28th

successivemonth(Chart

1).

However,thepaceofexpansiondeceleratedinOctober2023asitfellfromitsSeptember2023levelof57.5andsignaledtheslowestrateofexpansionsinceFebruary2023.??PMI

servicesremainedhighat58.4inOctober2023,althoughfallingfrom61inSeptember2023.Theeasingofexpansion

duringthemonthwasmainlyattributableto

strengtheninginflationarypressures.Reflectingslowerincreasesinmanufacturingproductionandservicesactivity,thecompositePMI

OutputIndex(sa)fellto58.4inOctober2023from61inSeptember2023.TheOctober2023levelindicatedtheweakestrateofexpansionsinceMarch2023.Chart

1:

PMI

and

IIP

growth24201612858.455.56560555045403530InOctober

2023,

bothmanufacturingandservices

PMI

remained

athighlevels

of55.5

and58.5

respectively,5.840-4although

their

rates

ofexpansion

decelerated.IIP(%growth,LHS)PMI(services,RHS)PMI(manufacturing,RHS)PMIbenchmark(RHS)Source:MoSPIandS&P

Global.1.2

IIP:

growth

decelerated

to

5.8%

in

September

2023Led

bya

broad-basedimprovement

in

theoutput

of

key

sub-industries,

IIP

growthincreased

to7.4%

in2QFY24

from4.8%

in1QFY24.?Accordingtothequickestimates,IIPgrowthfellto5.8%

inSeptember2023from10.3%inAugust2023(Chart

1).

In2QFY24,IIPshowedahighergrowthof

7.4%ascomparedto4.8%in

1QFY24.?Amongsub-industries,manufacturingoutput,withashareof77.6%intheoverallIIP,witnessedasharpslowdowninitsgrowthto4.5%inSeptember2023from9.3%inAugust2023.

Withinmanufacturing,sectorswhichshowedsharpmoderationin

theirgrowthratesduring

themonthincludecokeandrefinedpetroleumproducts(2.6%),othernon-metallicmineralproducts(4.7%),othermachineryandequipment(4.8%)2,andpharmaceuticalsandmedicinalproducts(6.8%).Outputof

foodproductscontractedby(-)0.4%in

September2023.??Amongother

majorsub-industries,whilegrowthintheoutputofminingandelectricitysectorsremained

buoyantat11.5%and9.9%respectivelyinSeptember2023,theywererelativelylowerwhencomparedto12.3%and15.3%respectivelyinAugust2023.As

perthe‘use-based’classificationofindustries,growthintheoutputofinfrastructure/constructionmoderatedto7.5%inSeptember2023from13.5%inAugust2023.Growthintheoutputof

capitalgoodsalsomoderatedto7.4%inSeptember2023from13.1%inAugust2023.Outputof

consumerdurablesandnon-durablesshowedalowgrowthof1.0%and2.7%respectivelyinSeptember2023ascomparedto

5.8%and9.6%inAugust2023.?Accordingtoprovisionalestimates,outputofeightcoreinfrastructureindustries(coreIIP)continuedtoshowastronggrowthof

8.1%inSeptember2023,althoughmoderatingfrom12.5%(revised)inAugust2023.

The

sub-industriesshowingstrong

growthratesincludedcoal(16.1%),steel(9.6%),electricity(9.3%)

andnaturalgas(6.5%).Onthecontrary,outputof

crudeoilcontractedby(-)0.4%inSeptember

2023.In

2QFY24,growthincoreIIPaveraged9.7%,improvingfrom6.0%in1QFY24.2

Referstomachineryandequipmentnotelsewhereclassified

(n.e.c)EconomyWatch:November2023|

6Home2

Inflation:

CPI

inflation

eased

to

a

four-month

low

of

4.9%

inOctober

2023CPI

inflation

eased

marginally

to

4.9%

in

October

2023

from

5.0%

in

September

2023

led

bycontinued

moderation

in

vegetable

prices

(Chart

2).?Inflationinvegetablesmoderatedto2.7%inOctober2023from3.4%inSeptember2023astomatopricesfellby(-)43.9%(y-o-y)inOctober2023ascomparedto(-)21.4%inSeptember2023.Inflationinmilkandproductseasedforthefifth

successivemonthto6.4%in

October2023.?????Fuelandlightpricescontractedforthesecondsuccessivemonth

by(-)0.4%inOctober2023ascomparedto(-)0.1%inSeptember2023mainlyreflectingtherecentpricecutonLPGcylindersforalldomesticusers.Inflationintransportation

andcommunicationservicesfelltoafive-monthlowof

2.0%inOctober2023,primarilyduetoafavorablebaseeffect.CoreCPI

inflation3

fellto4.3%inOctober2023,itslowestlevelsinceApril2020,from4.5%inthepreviousmonthledbylowerinflationintransportationandcommunicationservicesand

personalcareandeffects.Inflationarypressurescontinuedtoemanatefromspices(22.8%),pulsesandproducts

(18.8%),fruits(9.3%),egg(9.3%)

andcerealandproducts(10.7%)

inOctober

2023.InOctober2023,consumerfoodinflationremainedconstantatitslevelof6.6%witnessedinSeptember2023.Chart

2:

Inflation

(y-o-y,

in

%)8.06.04.02.00.0-2.018.0CPI

inflation

moderatedto

4.9%

in

October

2023from

5.0%

in

September2023,

inching

closer

tothe

RBI’s

4%

target.Core

CPI

inflation

easedfor

the

fourth4.9

13.59.04.34.50.0-0.5-4.5successive

month

to4.3%

in

October

2023.CPIinflationCoreCPIinflationWPIinflation(RHS)Source:MoSPI,Office

oftheEconomicAdviser,

GovernmentofIndia(GoI)WPI

reflecteda

contractionin

pricesatthe

wholesale

level

for

the

seventh

successive

month

at

(-)0.5%

inOctober2023

ascompared

to

(-)0.3%

in

September

2023.?WPI

foodindex-basedinflationmoderatedforthethirdsuccessivemonthto1.1%inOctober2023from1.5%inSeptember2023asthepace

ofcontractioninvegetablepricesquickenedto(-)21.0%inOctober2023from(-)15.0%inSeptember2023.??Inflationincrudepetroleumandnatural

gasturnednegativeat(-)2.2%inOctober2023from15.6%inSeptember2023,mainlyreflectingafavorablebaseeffect.Pricesoffuelandpowercontinuedtocontractforthesixthconsecutivemonthat(-)2.5%inOctober2023ascomparedto(-)3.3%inSeptember2023.Thepaceofcontractionin

mineraloilsfelltoaseven-monthlowof

(-)0.4%inOctober2023.??Inflationinmanufacturedproductsremainednegative

fortheeighthsuccessivemonthat(-)1.1%inOctober2023ascomparedto(-)1.3%inSeptember

2023.CoreWPI

witnessedacontractionfortheeighthsuccessivemonthat(-)1.0%in

October2023,marginallylowerthan(-)1.2%inSeptember2023.Majorproduct

groupsshowingacontractioninpricesinOctober2023includedmanufacturedchemicalsandchemicalproducts((-)6.8%)andmanufacturedbasicmetals((-)2.3%).3

CoreCPIinflationismeasuredindifferentwaysby

differentorganizations/agencies.Here,ithas

beencalculatedbyexcludingfood,and

fueland

lightfrom

theoverallindex.EconomyWatch:November2023|

7Home3

Fiscal:

GoI’s

capital

expenditure

growth

stood

at

43.1%

during1HFY243.1

Taxandnon-taxrevenuesAs

pertheCGA,GoI’sGTR(b)showedagrowthof

16.3%duringthefirstsixmonthsofFY24ascomparedto

17.6%duringthecorrespondingperiodof

FY23(Chart3).??During1HFY24,GTRstoodat48.2%of

theannualBE,higherthanthethree-year

averageratiobasedonactualcollectionsat41.6%.Directtaxes(a)

showedadouble-digitgrowthof

25.4%

whileindirecttaxes(a)grewby6.5%duringApril-SeptemberFY24.ThecorrespondinggrowthratesinFY23wereat23.5%and11.8%respectively.??????Corporateincometax(CIT)revenuesgrewby20.2%duringthefirstsix

monthsof

FY24ascomparedto21.6%duringthesameperiodinFY23.Personalincometax(PIT)revenuesgrewby31.1%duringApril-SeptemberFY24,higherthan25.7%duringthecorrespondingperiodofFY23.Amongindirecttaxes,GoI’sGSTrevenues(c)

grewby8.7%duringApril-SeptemberFY24,lowerthan33.4%duringthecorrespondingperiodofFY23,partlyowingtoanunfavorable

baseeffect.Unionexciseduties(UED)showedacontractionof

(-)10.8%duringthefirstsixmonthsof

FY24ascomparedto(-)18.5%duringthecorrespondingperiodofFY23.Customsdutiesgrewby23.1%during1HFY24ascomparedtoacontractionof

(-)6.9%during1HFY23.Chart

3:

Growth

in

central

gross

tax

revenues

during

April-September

(%,

y-o-y)10080During

1HFY24,GoI’s

GTR

showed

a60growth

of

16.3%,4017.664.216.3with

growth

in

directtaxes

at

25.4%

andthat

inindirect

taxesat6.5%.8.62001.5-20-40-21.6FY21FY19FY20FY22FY23FY24GrosstaxrevenuesDirecttaxesIndirecttaxesSource:MonthlyAccounts,CGA,

GovernmentofIndiaNotes:(a)Directtaxesincludepersonalincometaxand

corporationtax,and

indirecttaxesincludeunionexciseduties,arrearsofservicetax,customsduty,andGST

(comprisingCGST,

UTGST,IGST

and

GSTcompensationcess)(b)Othertaxes(securitiestransactiontax,

wealthtax,fringebenefittax,

bankingcashtransactiontax,

etc.)are

includedinthe

GoI’sGTRalongwithdirectand

indirecttaxes,(c)IGSTrevenuesaresubjecttofinalsettlement.?GoI’snon-taxrevenuesshowedahighgrowthof

50.2%duringApril-SeptemberFY24onaccountof

highreceiptof

dividendsand

profits

atINR1,20,657crore,exceedingitsFY24BEbyINR29,657crore.???Non-taxrevenues

during1HFY24asaproportionofannualBEstoodat78.5%,

muchhigherthanthethree-yearaverageratioof47.8%basedonactualcollections.Non-debtcapitalreceiptsoftheGoIduring1HFY24stoodat24%oftheBE,muchlowerthanthethree-yearaverageratioof39.6%basedonactualcollections.As

perDIPAM4,disinvestmentreceiptsasof22November2023stoodatINR8,000.15crores,thatis15.7%oftheFY24BEatINR51,000crore.4

.in/EconomyWatch:November2023|

83.2

Expenditures:

revenue

and

capital???GoI’stotalexpendituregrewby16.2%

duringApril-SeptemberFY24,higherthan12.2%duringthecorrespondingperiodofthepreviousyear.GoI’srevenueexpenditureshowedagrowthof

10%duringApril-SeptemberFY24ascomparedto6%duringthecorrespondingperiodof

FY23(Chart

4).GoI’scapitalexpenditurewasfront-loaded,showingastronggrowthof

43.1%during1HFY24.Thistrendofadouble-digit

growthinGoI’scapitalexpenditureduringtheinitialmonthsofthefiscalyearisvisibleevenforFY22andFY23.Chart

4:

Growth

in

central

expenditures

during

April-September

(%,

y-o-y)6049.538.343.150403020100GoI’s

total

expendituregrew

by16.2%

during1HFY24,

with

growthincapital

expenditure

at43.1%

andthatin13.811.114.06.36.015.310.0-11.61.0-10-20revenue

expenditure

at10%.RevenueexpenditureCapitalexpenditureSource(basicdata):MonthlyAccounts,CGA,

GovernmentofIndia3.3

Fiscal

imbalance?GoI’sfiscaldeficitduring1HFY24stoodat39.3%of

the

BE,slightlyhigherthan

thecorrespondingratiosinFY22andFY23butsignificantly

lowerthantherespectivelevelsintheperiodFY19toFY21(Chart

5).?GoI’srevenuedeficitduring1HFY24stoodat26.6%of

theBE,itslowestlevelat

leastsinceFY01.Chart

5:

Fiscal

and

revenue

deficit

during

April-September

as

percentage

of

BE150125.2108.199.91251007550250During

1HFY24,

GoI’sfiscal

andrevenuedeficits,

as

a

proportionof

their

annual

BE,stoodat39.3%

and26.6%,

respectively.31.427.726.6FY19FY20FY21FY22FY23FY24FiscaldeficitRevenuedeficitSource:MonthlyAccounts,CGA,

GovernmentofIndiaand

MoSPI.EconomyWatch:November2023|

9Home4

Comparative

trends:

IMF

projected

India’s

governmentdebt-GDP

ratio

at

82%

in

FY244.1

General

government

net

lending/borrowingTable

1:

General

government

net

lending/borrowing

(%

ofGDP)Country/Region

2022

2023

2024

2025

2026

2027

2028?TheIMF

(WorldEconomic

Outlook,October2023)hasprojectedfiscaldeficitrelativetoGDPforadvancedeconomies(AEs)aswellasemerging

marketanddevelopingeconomies(EMDEs)toremainabovethepre-pandemiclevelsduringtheforecastperiodfrom2023to2028.However,someconsolidationisexpectedforbothgroupsof

countriesbeginning2024.AEsUSUKEuroareaJapanEMDEsBrazil-3.3

-5.2

-4.4

-4.2

-3.9

-3.8

-4.0-3.7

-8.2

-7.4

-7.4

-7.0

-6.7

-7.0-5.5

-4.5

-3.9

-3.7

-3.7

-3.5

-3.5-3.6

-3.5

-2.7

-2.3

-2.1

-2.1

-2.1-6.9

-5.6

-3.7

-2.6

-2.7

-2.9

-3.3-5.0

-5.5

-5.4

-5.1

-5.1

-5.1

-5.1-3.1

-7.1

-6.0

-5.3

-4.8

-4.4

-4.4RussiaIndia*China-1.4

-3.7

-2.6

-1.3

-0.6

-0.10.3?Amongtheselectedmajor

AEs,fiscaldeficitrelativetoGDPforthe

USisforecastedtosurgeto8.2%in2023asthegeneralgovernmentfiscalstanceisexpectedtoremainexpansionaryinorder-9.2

-8.8

-8.5

-8.0

-7.7

-7.4

-7.2-7.5

-7.1

-7.0

-7.3

-7.5

-7.6

-7.8-4.7

-6.4

-6.5

-6.8

-6.5

-6.5

-6.7South

AfricaSource(basicdata):IMFWorld

EconomicOutlook(October2023)*Datapertainstofiscalyear;-ve

indicatesdeficitand+veindicatessurplustosupport

growth

amidslowwagegrowth,savingsaccumulatedduringthepandemicrunningout,andatightmonetary

policy.??AmongEMDEs,thehighest

generalgovernmentfiscaldeficitrelativetoGDPisforecastedforIndiaat8.8%in2023(FY24),followedbyChinaat7.1%.However,duringthesubsequentyearsoftheforecastperiod,thereisanexpectationofareversalofthistrendwithIndia’sfiscaldeficitfallingto7.2%ofGDPby2028(FY29)andthatofChinarisingto7.8%bythisyear.(Table

1).Russia,whichhasgenerallywitnessedafiscalsurplusintheprepandemicyears,

isprojectedtoshowanincreaseinitsfiscaldeficitto3.7%of

GDPin

2023asaresultofasubstantialfiscalstimulusbythegovernmentinordertosupportgrowth.Afterthesuspensionofthefiscalrulein2022inresponsetothesanctionsimposed,anewfiscalruleisexpectedtobe

fullyeffectivein2025.Thisisexpectedtoenableareductioninthefiscaldeficitinsubsequentyears

oftheforecastperiod.4.2

General

government

gross

debtTable

2:

General

government

gross

debt

(%

of

GDP)?Globally,acombinationofrisinginterestrates,weakeningcurrenciesandsluggishexportgrowthhasput

pressureongovernmentfinances,leadingtoanincreaseingovernmentdebtlevels.Country/RegionAEsUSUKEuroareaJapanEMDEsBrazilRussiaIndia*ChinaSouth

Africa2022

2023

2024

2025

2026

2027

2028112.3

112.1

112.8

113.8

114.6

115.3

116.3121.3

123.3

126.9

130.3

132.9

135.1

137.5101.9

104.1

105.9

107.3

108.5

108.2

108.291.0