The International Monetary Fund (IMF) has maintained its 5.4 per cent economic growth projection for Indian economy for the ongoing fiscal 2014-15, as per its latest World Economic Outlook survey update. For 2015-16, it has projected India’s economy to grow 6.4 per cent.
IMF has, however, reduced growth forecast for the world and other developing countries, while lowering growth projection in the emerging markets to around 4.6 per cent this year against 4.9 per cent prediction in April.
The survey has predicted that China’s economy is expected to grow 7.4 per cent this year, compared with its projection of 7.5 per cent in April. Also, growth in the world’s second-largest economy will slow down to 7.1 per cent next year, less than April forecast of 7.3 per cent growth, IMF added.
“In India, investment is expected to pick up gradually in the rest of the year, which will offset the weak first-quarter agricultural performance,” it said in the update.
On the other side, Brazil’s economy will also be slow in 2014 before an expected recovery in 2015, as investment and consumption continue to be affected by weak confidence and tight financial conditions. In Mexico, the growth is expected to pick up in 2014-15, but the forecast for 2014 is weaker than that in the April outlook.
For the global economy, IMF has lowered GDP growth forecast to 3.4 per cent for 2014 from 3.6 per cent forecast in April. However, it has upped its projection for next year growth to 4 per cent from 3.9 per cent forecast four months ago. In the US, growth is projected to average 1.7 per cent in 2014, rising to 3 per cent in 2015, it said.
“The global recovery continues but at an uneven pace, and that downside risks remain. Continued policy efforts are needed to secure a more robust recovery,” the update said.
“The WEO Update projects that global growth will rebound as the temporary constraints recede and recent policy actions to support expansion gain ground. For example, in China, limited stimulus measures have been deployed to support demand,” IMF added.
(Edited by Joby Puthuparampil Johnson)