The Indian economy is forecast to grow at 7.2% in 2017-18 and 7.7% in 2018-19, the International Monetary Fund (IMF) said in its latest forecast on Monday.
“Growth in India is forecast to pick up further in 2017 and 2018, in line with the April 2017 forecast. While activity slowed, following the currency exchange initiative, growth for 2016 — at 7.1% –was higher than anticipated due to strong government spending and data revisions that showed stronger momentum in the first part of the year,” IMF said in its World Economic Outlook update.
This would keep India as the fastest growing major economy in the world and in Asia. The Indian economy is expected to grow 7.5% (government estimate) in the current financial year as abundant monsoon rains are expected to boost rural income and overall growth. Most multilateral agencies expect growth to be over 7% in the current fiscal, and to gather momentum next year.
The sharp decline in inflation has triggered hopes of a rate cut by RBI, which should help in accelerating growth as well.
Growth for China was revised to 6.7% in 2017 and 6.4% in 2018, about 0.1 and 0.2 percentages higher than IMF’s previous estimates.
“China’s growth projections have been revised up, reflecting a strong first quarter of 2017 and expectations of continued fiscal support,” IMF said. The multilateral agency said the pick-up in global growth anticipated in the April World Economic Outlook remains on track, with global output projected to grow by 3.5% in 2017 and 3.6% in 2018.
“The unchanged global growth projections mask somewhat different contributions at the country level. US growth projections are lower than in April, primarily reflecting the assumption that fiscal policy will be less expansionary going forward than previously anticipated,” it said.
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