IMF projects India’s growth at 7.3% in 2018 and 7.4% in 2019
WASHINGTON: The International Monetary Fund (IMF) on Tuesday forecasted India’s growth rate at 7.3 per cent for 2018 and at 7.4 per cent in 2019.
An upswing in economic risks due to rising trade tensions and debt levels has prompted the International Monetary Fund to cut its forecast for world growth for this year and next.
“India’s growth is expected to increase to 7.3 per cent in 2018 and to 7.4 per cent in 2019 (slightly lower than in the April 2018 World Economic Outlook [WEO] for 2019, given the recent increase in oil prices and the tightening of global financial conditions), up from 6.7 per cent in 2017,” the IMF said in its latest World Economic Outlook report.
According to IMF, India has recovered from the transitory shocks of demonetisation and the implementation of the Goods and Services Tax and has strengthened investment and has become a robust private consumer.
India’s medium-term growth prospects remain strong at 7¾ per cent, benefiting from ongoing structural reform, but have been marked down by just under ½ percentage point relative to the April 2018 WEO, it said.
The IMF also cut the global growth forecast to 3.7% for both 2018, 2019 as risks rise. It cut growth estimates for US, China in 2019 on trade dispute. If the projections turn out to be true, India would then regain the tag of fastest growing major economies of the world, crossing China with more than 0.7 percentage point in 2018 and an impressive 1.2 percentage point growth lead in 2019.
China was the fastest-growing economy in 2017 as it was ahead of India by 0.2 percentage points.
Released in Bali during the annual meeting of the IMF and the World Bank, the IMF’s flagship World Economic Outlook said its 2019 growth projection for China is lower than in April, given the latest round of US tariffs on Chinese imports, as are its projections for India.
(With agency inputs)