India’s economy is poised to pick up this year: IMF
NEW DELHI : The International Monetary Fund (IMF) has said India’s economy is poised to pick up this year. IMF’s World Economic Outlook Update, released yesterday by its chief economist Gita Gopinath in Davos, projected that India will grow at 7.5 per cent this year and 7.7 per cent in 2020, an impressive over one percentage point ahead of China’s estimated growth of 6.2 per cent in these two years.
India will grow at a world-beating 7.5% in 2019-20 amid slower global expansion, the International Monetary Fund (IMF) said, upgrading its October forecast of 7.4%. “India’s economy is poised to pick up in 2019, benefiting from lower oil prices and a slower pace of monetary tightening than previously expected, as inflation pressures ease,” IMF said in an update to its biannual World Economic Outlook (WEO) on Monday.The review comes even as trade tensions and a weakening Europe cast a shadow over global growth.
IMF estimates India to grow 7.3% in 2018-19 and 7.7% in 2020-21. India’s contribution to world growth has risen from 7.6% during 2000-08 to 14.5% in 2018, according to IMF. Without naming India, IMF said that in emerging markets and developing economies, where inflation expectations are well-anchored, monetary policy could provide support to domestic activity as needed.
With retail inflation slowing to an 18-month low of 2.19% in December—though services inflation remains elevated—many analysts believe the Reserve Bank of India’s (RBI) monetary policy committee will cut policy rates at its review meeting on 7 February. “We will take necessary steps to maintain financial stability and to facilitate enabling conditions for sustainable and robust growth,” RBI governor Shaktikanta Das said in his first speech at the Vibrant Gujarat Summit on Friday after taking charge as the central bank’s 25th governor last month.
The IMF attributed the pick up to lower oil prices and a slower pace of monetary tightening. IMF said India would remain one of the fastest growing major economies of the world. Despite fiscal stimulus that offsets some of the impacts of higher US tariffs, China’s economy will slow down due to the combined influence of needed financial regulatory tightening and trade tensions with the US.
China which grew at 6.9 per cent in 2017, as compared to 6.7 per cent by India, had a growth rate of 6.6 per cent in 2018. The IMF said while, the Chinese growth rate has been on a downward slope India has experienced an upward trajectory in these years. The IMF report comes days after the Price waterhouse Cooper’s Global Economy Watch said that India is likely to surpass the United Kingdom in the world’s largest economy rankings this year.(With Agency Inputs ).
