India’s real gross domestic product grew by 8.7 per cent in the 2021-2022 fiscal year, boosting its total output above pre-coronavirus levels despite global macroeconomic headwinds, the International Monetary Fund has said.
India, Asia's third-largest economy and the world's fifth largest, rebounded from the deep pandemic-induced downturn on the back of fiscal measures to address high prices and monetary policy tightening to address elevated inflation, the Washington-based lender said in a report on Friday.
“Economic headwinds include inflation pressures, tighter global financial conditions, the fallout from the war in Ukraine and associated sanctions on Russia, and significantly slower growth in China and advanced economies,” the fund said.
“Growth has continued this fiscal year, supported by a recovery in the labour market and increasing credit to the private sector.”
In October, the IMF cut its global economic growth forecast for next year, amid the Ukraine conflict, broadening inflation pressures and a slowdown in China, the world’s second-largest economy.
The fund maintained its global economic estimate for this year at 3.2 per cent but downgraded next year's forecast to 2.7 per cent — 0.2 percentage points lower than its July forecast.
There is a 25 per cent probability that growth could fall below 2 per cent next year, the IMF said in its World Economic Outlook report at the time.
Global economic growth in 2023 is expected to be as weak as in 2009 during the financial crisis as a result of the Ukraine conflict and its impact on the world economy, according to the Institute of International Finance.
Economic growth in India is expected to moderate, reflecting the less favourable outlook and tighter financial conditions, the IMF said.
Real GDP is projected to grow at 6.8 per cent for the current financial year to the end of March, and by 6.1 per cent in 2023-2024 fiscal year, according to the fund's estimates.
Reflecting broad-based price pressures, inflation in India is forecast at 6.9 per cent in the 2022-2023 fiscal year and expected to moderate only gradually over the next year.
Rising inflation can further dampen domestic demand and affect vulnerable groups, according to the fund.
India’s current account deficit is expected to increase to 3.5 per cent of GDP in the 2022-2023 fiscal year as a result of both higher commodity prices and strengthening import demand, the lender said.
“A sharp global growth slowdown in the near term would affect India through trade and financial channels,” it said.
“Intensifying spillovers from the war in Ukraine can cause disruptions in the global food and energy markets, with significant impact on India. Over the medium term, reduced international co-operation can further disrupt trade and increase financial markets’ volatility.”
However, the successful introduction of wide-ranging reforms or greater-than-expected dividends from the advances in digitalisation could increase India’s medium-term growth potential, the IMF said.
A sharp global growth slowdown in the near term would affect India through trade and financial channels
International Monetary Fund
Additional monetary tightening should be carefully calibrated and communicated, it said.
“The exchange rate should act as the main shock absorber, with intervention limited to address disorderly market conditions,” the report said.
The IMF also recommended that India’s financial sector policies should continue to support the exit of non-viable companies and encourage banks to build capital buffers and recognise problem loans.
Reforms to strengthen governance and reduce the government’s footprint are needed to support strong medium-term growth, it said.
The lender also highlighted the need for structural reforms to promote resilient, green and inclusive growth.
“India is making important progress in implementing its climate agenda. Additional efforts, as well as financing and technology transfer, are needed to move to a carbon-neutral economy,” the IMF said.
“The pandemic has highlighted the need to strengthen health, education and social spending, and narrowing the digital divide through improved digital access and literacy.
“Improving productivity, strengthening governance and furthering trade liberalisation would help medium-term growth.”
What is blockchain?
Blockchain is a form of distributed ledger technology, a digital system in which data is recorded across multiple places at the same time. Unlike traditional databases, DLTs have no central administrator or centralised data storage. They are transparent because the data is visible and, because they are automatically replicated and impossible to be tampered with, they are secure.
The main difference between blockchain and other forms of DLT is the way data is stored as ‘blocks’ – new transactions are added to the existing ‘chain’ of past transactions, hence the name ‘blockchain’. It is impossible to delete or modify information on the chain due to the replication of blocks across various locations.
Blockchain is mostly associated with cryptocurrency Bitcoin. Due to the inability to tamper with transactions, advocates say this makes the currency more secure and safer than traditional systems. It is maintained by a network of people referred to as ‘miners’, who receive rewards for solving complex mathematical equations that enable transactions to go through.
However, one of the major problems that has come to light has been the presence of illicit material buried in the Bitcoin blockchain, linking it to the dark web.
Other blockchain platforms can offer things like smart contracts, which are automatically implemented when specific conditions from all interested parties are reached, cutting the time involved and the risk of mistakes. Another use could be storing medical records, as patients can be confident their information cannot be changed. The technology can also be used in supply chains, voting and has the potential to used for storing property records.
Need to know
The flights: Flydubai flies from Dubai to Kilimanjaro airport via Dar es Salaam from Dh1,619 return including taxes. The trip takes 8 hours.
The trek: Make sure that whatever tour company you select to climb Kilimanjaro, that it is a reputable one. The way to climb successfully would be with experienced guides and porters, from a company committed to quality, safety and an ethical approach to the mountain and its staff. Sonia Nazareth booked a VIP package through Safari Africa. The tour works out to $4,775 (Dh17,538) per person, based on a 4-person booking scheme, for 9 nights on the mountain (including one night before and after the trek at Arusha). The price includes all meals, a head guide, an assistant guide for every 2 trekkers, porters to carry the luggage, a cook and kitchen staff, a dining and mess tent, a sleeping tent set up for 2 persons, a chemical toilet and park entrance fees. The tiny ration of heated water provided for our bath in our makeshift private bathroom stall was the greatest luxury. A standard package, also based on a 4-person booking, works out to $3,050 (Dh11,202) per person.
When to go: You can climb Kili at any time of year, but the best months to ascend are January-February and September-October. Also good are July and August, if you’re tolerant of the colder weather that winter brings.
Do not underestimate the importance of kit. Even if you’re travelling at a relatively pleasant time, be geared up for the cold and the rain.
Indika
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Ten tax points to be aware of in 2026
1. Domestic VAT refund amendments: request your refund within five years
If a business does not apply for the refund on time, they lose their credit.
2. E-invoicing in the UAE
Businesses should continue preparing for the implementation of e-invoicing in the UAE, with 2026 a preparation and transition period ahead of phased mandatory adoption.
3. More tax audits
Tax authorities are increasingly using data already available across multiple filings to identify audit risks.
4. More beneficial VAT and excise tax penalty regime
Tax disputes are expected to become more frequent and more structured, with clearer administrative objection and appeal processes. The UAE has adopted a new penalty regime for VAT and excise disputes, which now mirrors the penalty regime for corporate tax.
5. Greater emphasis on statutory audit
There is a greater need for the accuracy of financial statements. The International Financial Reporting Standards standards need to be strictly adhered to and, as a result, the quality of the audits will need to increase.
6. Further transfer pricing enforcement
Transfer pricing enforcement, which refers to the practice of establishing prices for internal transactions between related entities, is expected to broaden in scope. The UAE will shortly open the possibility to negotiate advance pricing agreements, or essentially rulings for transfer pricing purposes.
7. Limited time periods for audits
Recent amendments also introduce a default five-year limitation period for tax audits and assessments, subject to specific statutory exceptions. While the standard audit and assessment period is five years, this may be extended to up to 15 years in cases involving fraud or tax evasion.
8. Pillar 2 implementation
Many multinational groups will begin to feel the practical effect of the Domestic Minimum Top-Up Tax (DMTT), the UAE's implementation of the OECD’s global minimum tax under Pillar 2. While the rules apply for financial years starting on or after January 1, 2025, it is 2026 that marks the transition to an operational phase.
9. Reduced compliance obligations for imported goods and services
Businesses that apply the reverse-charge mechanism for VAT purposes in the UAE may benefit from reduced compliance obligations.
10. Substance and CbC reporting focus
Tax authorities are expected to continue strengthening the enforcement of economic substance and Country-by-Country (CbC) reporting frameworks. In the UAE, these regimes are increasingly being used as risk-assessment tools, providing tax authorities with a comprehensive view of multinational groups’ global footprints and enabling them to assess whether profits are aligned with real economic activity.
Contributed by Thomas Vanhee and Hend Rashwan, Aurifer
How to avoid crypto fraud
- Use unique usernames and passwords while enabling multi-factor authentication.
- Use an offline private key, a physical device that requires manual activation, whenever you access your wallet.
- Avoid suspicious social media ads promoting fraudulent schemes.
- Only invest in crypto projects that you fully understand.
- Critically assess whether a project’s promises or returns seem too good to be true.
- Only use reputable platforms that have a track record of strong regulatory compliance.
- Store funds in hardware wallets as opposed to online exchanges.
