IMF retains India's GDP forecast at 7.2 per cent for the current fiscal, while the growth is projected to accelerate to 7.7 per cent in 2018-19, from 7.2 per cent forecast for 2017-18
International Monetary Fund said India would stay ahead of China in growth sweepstakes in 2017, and 2018, while retaining the country's GDP forecast at 7.2 per cent for the current fiscal. As per the World Economic Outlook Update, India's growth is projected to accelerate to 7.7 per cent in 2018-19, from 7.2 per cent forecast for 2017-18.
While the IMF has retained India's growth estimate as provided in the WEO in April, it said India will continue to grow faster than China in 2017 as well as 2018. It said India's growth 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 per cent, was higher than anticipated due to strong government spending and data revisions that show stronger momentum in the first part of the year.”
As per the update, inflation in advanced economies remain subdued and generally below target, and has been declining in several emerging economies such as Brazil, India, and Russia too. It said economic activity in both advanced and emerging and developing economies is forecast to accelerate in 2017 to 2 per cent and 4.6 per cent respectively, with global growth projected to be 3.5 per cent, unchanged from the April forecast.
“While risks around the global growth forecast appears broadly balanced in the near term, they remain skewed to the downside over the medium term,” the IMF said. It said the expected higher growth in the eurozone indicated “stronger momentum in domestic demand than previously expected.”
The IMF revised down its 2017 forecast for the UK by 0.3 percentage point to 1.7 per cent, citing weaker-than-expected activity in the first quarter. It left its 2018 forecast unchanged at 1.5 per cent. It also said it expected slightly higher growth in Japan this year to 1.3 per cent from a forecast of 1.2 per cent in April, citing stronger first-quarter growth buoyed by private consumption, investment and exports. Its forecast for Japan's 2018 growth was unchanged at 0.6 per cent.
For China, the IMF said it now expected stronger growth of 6.7 per cent in 2017, up 0.1 percentage point from the April forecast. China's growth will still moderate in 2018 to 6.4 per cent, but the IMF said that was up 0.2 percentage point from the April forecast because of expectations that Beijing will maintain high public investment.
