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IMF revises India’s GDP growth forecast downward to 7.0% in 2019

24 Jul 2019 Evaluate

The International Monetary Fund (IMF) in its World Economic Update has revised downward India’s Gross Domestic Product (GDP) growth forecast by 0.3% for 2019 and 2020 to 7.0% and 7.2%, respectively, over its previous projections early this year. It said the downward revision for both years reflects a weaker-than expected outlook for domestic demand. However, it also said the country will still be the fastest growing major economy of the world and much ahead of China.

In China, it said the negative effects of escalating tariffs and weakening external demand have added pressure to an economy already in the midst of a structural slowdown and needed regulatory strengthening to rein in high dependence on debt. It further said with policy stimulus expected to support activity in the face of the adverse external shock, growth is forecast at 6.2% in 2019 and 6.0% in 2020 -- 0.1 percentage point lower each year.

On the global growth, the IMF said dynamism in the global economy is being weighed down by prolonged policy uncertainty as trade tensions remain heightened despite the recent US-China trade truce, technology tensions have erupted threatening global technology supply chains, and the prospects of a no-deal Brexit have increased. It added that a major downside risk to the outlook remains an escalation of trade and technology tensions that can significantly disrupt global supply chains.

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