The International Monetary Fund’s (IMF) July World Economic Outlook Update retained India’s projected GDP growth rate for 2017-18 at 7.2%, and at 7.7% for 2018-19.
The IMF added that while activity slowed following demonetisation, growth for 2016-17 was higher than anticipated on the back of government spending and stronger momentum in the first part of that year, as revealed by data revisions.
“Growth in India is forecast to pick up further in 2017 and 2018, in line with the April 2017 forecast,” the IMF said. “While activity slowed following the currency exchange initiative [demonetisation], growth for 2016 — at 7.1% — was higher than anticipated due to strong government spending and data revisions that show stronger momentum in the first part of the year.”
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The IMF had in April update had projected GDP GDP growth in India at 7.2% and 7.7% in the financial years 2017-18 and 2018-19, respectively. The July update retained those projections. This trend is in keeping with the global growth trend.
‘On track’
“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 IMF added said.
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“The unchanged global growth projections mask somewhat different contributions at the country level. U.S. growth projections are lower than in April, primarily reflecting the assumption that fiscal policy will be less expansionary going forward than previously anticipated.”
On the other hand, the growth outlook was revised upwards for Japan, the euro area, and China.
“Inflation in advanced economies remains subdued and generally below targets; it has also been declining in several emerging economies, such as Brazil, India, and Russia,” the IMF said.