India’s still faster than everyone else …
The International Monetary Fund cut its forecast for India’s economic growth, but said the country is still the fastest growing major economy in the world.
The IMF now expects India’s gross domestic product to grow 7.3% this year, down from the 7.5% forecast in the World Economic Outlook released in July. India grew 7.3% last year.
“Growth will benefit from recent policy reforms, a consequent pickup in investment, and lower commodity prices,” the IMF said, adding that demand in India is projected to remain strong.
In the “World Economic Outlook — Adjusting to Lower Commodity Prices”, released this week ahead of its annual meeting, the IMF reiterated its 7.5% forecast for fiscal year 2017.
“With China gradually transitioning into an environment of lower growth, India could durably occupy the top growth spot among large emerging markets,” said the report.
The global lender expects India to remain the fastest growing large economy through 2020, at a rate of 7.7%
In the second quarter, India posted a slower-than-expected 7% growth. Then last month, the Reserve Bank of India cuts its growth estimate to 7.4% from the previous expectation of 7.6% for the year.
Despite the decline, India is still growing at more than twice the global economy. The fund lowered its expectation for global growth in 2015 by 0.3 percentage point to 3.1%. The IMF also predicted China’s growth would slow to 6.8% this year and to 6.3% next year.
“In an environment of declining commodity prices, reduced capital flows to emerging markets and pressure on their currencies, and increasing financial market volatility, downside risks to the outlook have risen, particularly for emerging market and developing economies,” the IMF document said.