IMF cuts India growth forecast for 2018 by a notch to 7.3%

Washington DC (USA): The International Monetary Fund (IMF) on Monday projected a growth rate of 7.3% in 2018 and 7.5% in 2019 for India as against 6.7% in 2017, making it the fastest growing country among major economies.

However, the latest growth rate projection for India is slightly less  0.1 percentage point in 2018 and 0.3 percentage points in 2019 than its April projections.

India’s growth rate is expected to rise from 6.7% in 2017 to 7.3% in 2018 and 7.5% in 2019, as drags from the currency exchange initiative and the introduction of the Goods and Services Tax fade, said the IMF’s latest World Economic Outlook (WEO) update.

The projection is 0.1 and 0.3 percentage points lower for 2018 and 2019, respectively, than in the April WEO, reflecting negative effects of higher oil prices on domestic demand and faster than-anticipated monetary policy tightening due to higher expected inflation, it said.

Despite this slight downgrade in its projections, India continues to outperform China, IMF’s WEO update figures reflect. Growth in China is projected to moderate from 6.9% in 2017 to 6.6% in 2018 and 6.4% in 2019, as regulatory tightening of the financial sector takes hold and external demand softens, the report said.

The IMF said global growth is projected to reach 3.9% in 2018 and 2019, in line with the forecast of the April 2018 WEO.