As compared to the previous year’s growth statistics of 6.7%, India’s growth rate is expected to pop up this year. International Monetary Fund predicts an acceleration of 0.6% in its growth momentum this year.
World Economic Outlook [WEO] for 2019, exhibits a clear surge of 0.7% in India’s growth momentum, slightly lower than the paced growth of April 2018.
IMF anticipated a 7.3% growth for 2018 and 7.4% for 2019. In its World Economic Outlook [WEO] report, optimistic signs of growth for India. IMF also hailed financial policies implemented by India such as Goods and Services tax, revised Bankruptcy code along with strengthening investment and robust private consumption and many more.
India’s medium-term growth prospects remain strong at 7.75 per cent, benefiting from ongoing structural reform, but have been marked down by just under 0.5 percentage point relative to the April 2018, said WEO.
If this surge in growth continues, India will supersede China and regain the badge of fastest growing nation with more than 0.7 percentage point in 2018 and an impressive 1.2 percentage point growth lead in 2019.
China was the fastest growing economy in 2017 as it was ahead of India by 0.2 percentage points. For the record, the IMF has lowered the growth projections for both India and China by 0.4 per cent and 0.32 per cent from its annual World Economic Outlook.
Released in Bali during the annual meeting of the IMF and the World Bank, the World Economic Outlook said its 2019 growth projection for China is lower than in April, given the latest round of US tariffs on Chinese imports, as are its projections for India.
In India, the report said, important reforms have been implemented in recent years, including the Goods and Services Tax, the inflation-targeting framework, the Insolvency and Bankruptcy Code, and steps to liberalise foreign investment and make it easier to do business.
According to the World Economic Outlook, in India, reform priorities include reviving bank credit and enhancing the efficiency of credit provision by accelerating the cleanup of bank and corporate balance sheets and improving the governance of public sector banks.
In India, a high interest burden and risks from rising yields require continued focus on debt reduction to establish policy credibility and build buffers.
It also said inflation in India is on the rise, estimated at 3.6 per cent in fiscal year 2017/18 and projected at 4.7 per cent in fiscal year 2018/19, compared with 4.5 per cent in fiscal year 2016/17, amid accelerating demand and rising fuel prices.
The report said that aggregate growth in the emerging market and developing economy group stabilised in the first half of 2018.
The report also demonstrated a downfall in the growth velocity of China for the first quarter of 2018 and 2019 with a 0.2 % fall triggered by US re-evaluation of Tariffs on Chinese goods.
The report noticed a boost in US growth pace for 2018 that is 2.9 per cent and that of 2019 has been powered to 2.5 percent.
Emerging Asia continued to register strong growth, supported by a domestic demand-led pickup in the Indian economy from a four-year-low pace of expansion in 2017, even as activity in China moderated in the second quarter in response to regulatory tightening of the property sector and non-bank financial intermediation, it said.