IMF predicts India to grow at 7.3 per cent in 2018-19
The International Monetary Fund (IMF) forecasted a growth rate of 7.3 percent for India in the current year of 2018 and that of 7.4 percent in 2019. In 2017, India had clocked a 6.7 per cent growth rate. The latest growth prediction for India, however, is slightly lower than what was predicted in April 2018 World Economic Outlook for 2019 due to the recent increase in oil prices and tightening of global financial conditions.
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- The report, the acceleration reflects a rebound from transitory shocks (the currency exchange initiative and implementation of the national Goods and Services Tax), with strengthening investment and robust private consumption.
- The report states that India’s medium-term growth prospects remain strong at 7.75 percent, benefiting from ongoing structural reform, but have been marked down by just under 0.5 percentage point relative to the April 2018 WEO.
- The IMF has lowered the growth projections for both India and China by 0.4 percent and 0.32 percent, respectively, from its annual April’s World Economic Outlook.
- The report stated that the 0.2 percentage point downgrade to the 2019 growth forecast is attributable to the negative effect of recent tariff actions, assumed to be partially offset by policy stimulus.
- China’s growth rate is projected to moderate from 6.9 percent in 2017 to 6.6 percent in 2018 and 6.2 percent in 2019, reflecting a slowing external demand growth and necessary financial regulatory tightening. The nation’s slow growth projection for 2019 is also a result of the latest round of US tariffs on Chinese imports.
- The report said that aggregate growth in the emerging market and developing economy group stabilized in the first half of 2018.