The International Monetary Fund (IMF) in its World Economic Outlook (WEO) update has retained India’s growth projection at 7.3 per cent in the current fiscal and 7.5 per cent for the next year, even as it cut world economic outlook to 3.4 per cent for 2016, stating that India would continue to grow at a robust pace. IMF has also warned that there were important risks to the outlook, which are particularly prominent for emerging market and developing economies and could stall global recovery.
IMF in its update stated that India and the rest of emerging Asia are generally projected to continue growing at a robust pace, with some countries facing strong headwinds from China’s economic rebalancing and global manufacturing weakness. IMF said that the downward revision in global growth was largely accounted for by Brazil, where a recession is proving to be deeper and more protracted than previously expected; the Middle East, where prospects have been hurt by lower oil prices; and the US, where the growth momentum is now expected to hold steady rather than accelerate and a generalised slowdown in emerging market economies. IMF added that if these key challenges are not successfully managed, global growth could be derailed.
IMF further said that China’s growth would slow to 6.3 per cent in 2016 and to 6 per cent in 2017. As for the world growth, IMF forecast 3.4 per cent for 2016 and 3.6 per cent for 2017. Brazil’s economy is now projected to contract by 3.5 per cent in 2016, against the October projection of one per cent contraction. The US economy is expected to grow 2.6 per cent in 2016, against an earlier projection of 2.8 per cent.
IMF in the last WEO update released in October had projected India to grow at 7.3 per cent in the current fiscal and 7.5 per cent in 2016-17. As for world growth, figures were at 3.6 per cent for 2016 and 3.8 per cent for 2017. IMF said the pick-up in global activity is projected to be more gradual than in the October WEO, especially in emerging market and developing economies which accounts for over 70 percent of the global growth.
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