The International Monetary Fund and the World Bank have predicted a 7.6 per cent growth for India in 2016. The IMF said India would remain the world's fastest-growing large economy as it raised its growth forecast for the country by 0.2 percentage point from its earlier projections to 7.6 per cent for the current fiscal and the year after that.
It said India's economy continued to recover strongly, "benefiting from a large improvement in the terms of trade, effective policy actions and stronger external buffers, which have helped boost sentiment. Nevertheless, underlying inflationary pressures arising from bottlenecks in the food storage and distribution sector point to the need for further structural reforms to ensure that consumer price inflation remains within the target band over the medium term."
The World Bank, meanwhile, said India's GDP could grow 7.6 per cent in 2016-17, and 7.7 per cent in 2017, supported by "expectations of a rebound in agriculture, civil service pay reforms supporting consumption, increasingly positive contributions from exports and a recovery of private investment in the medium term." It also did add that India still faces the challenges of further accelerating the responsiveness of poverty reduction to growth, promoting inclusion, and extending gains to a broader range of human development outcomes.
Keeping the global growth forecast unchanged at 3.1 per cent for 2016, and 3.8 per cent in the year after, the IMF altered its forecast for the US by 0.6 percentage point for 2016 and by 0.3 percentage point for 2017, projecting growth rates of 1.6 per cent and 2.2 per cent, respectively.
