The IMF said that the Indian economy is performing well.(File photo)

International Monetary Fund (IMF) Chief Economist Pierre Oliver Gorinches said on Tuesday that India's economy is performing very well, but it still needs more monetary tightening.

The IMF has reduced India's economic growth forecast for the year 2022 to 6.8 percent.

Earlier in July, the IMF had projected India's growth rate to be 7.4 percent.

The IMF, in its latest report released on Tuesday on the world economic scenario, said that India's growth rate this year is likely to remain at 6.8 percent.

This is 0.6 percent lower than the previous estimate expressed in July.

This indicates a below-expected economic activity in the second quarter and a slowdown in external demand.

"India is performing very well in 2022 and is expected to grow strongly in 2023 as well," Gorinches told reporters here after the release of the IMF report.

We expect its growth rate to be 6.8 percent this year and 6.1 percent next year.

Along with this, he said that inflation in India still remains above the target of the central bank.

"We expect India's inflation to be 6.9 per cent in the financial year 2022-23.

Next year it may fall to 5.1 percent.

In such a situation, at the policy level, we feel that fiscal and monetary policy should continue to be tight.

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