The International Monetary Fund (IMF) has slashed its estimate of India’s economic growth for last year to 4.8 per cent from 6.1 per cent projected in October, citing a sharper-than expected slowdown in domestic demand and stress in the non-banking financial sector. It now expects the world economy to have expanded 2.9 per cent in 2019 over the earlier 3 per cent.
The IMF’s World Economic Outlook (WEO) Update revised India’s 2020 growth forecast to 5.8 per cent, down 0.9 percentage point from the previous estimate. For 2021, the estimate is 6.5 per cent.The International Monetary Fund has slashed its estimate of India's economic growth for last year to 4.8 per cent from 6.1 per cent projected in October, citing a sharper-than expected slowdown in domestic demand and stress in the non-banking financial sector. It now expects the world economy to have expanded 2.9 per cent in 2019 over the earlier 3 per cent.#
The report cited monetary and fiscal stimulus, along with its expectation of subdued oil prices, for the projected improvement in India’s growth this year and the next.
Global growth is projected to accelerate to 3.3 per cent in 2020 from 2.9 per cent in 2019 and to 3.4 per cent in 2021. The IMF has trimmed its estimate on the world economy by 0.1 point each for 2019 and 2020 and by 0.2 percentage point for 2021 from the earlier forecasts.
The WEO estimates China to have grown 6.1 per cent in 2019. For the current year, the forecast is for 6 per cent growth.
“A more subdued growth forecast for India accounts for the lion’s share of the downward revisions,” the IMF said.
In terms of policy, the report suggested governments to enhance inclusiveness and build governance structures that strengthen social cohesion and ensure adequate safety nets to protect the vulnerable.
Fibre2Fashion News Desk (DS)
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