United Nations : The International Monetary Fund (IMF) cut India’s growth projections for this fiscal year to 7.3 per cent and for the next to 7.5 per cent on Monday, although the country will still retain its top spot in the global growth league.
The World Economic Outlook (WEO) Update reduced by 0.1 per cent the projections made in April for this year and by 0.3 per cent for 2019, citing the impact of higher oil prices and the likelihood of monetary policy tightening. Maury Obstfeld, IMF’s director of the Research Department, said that the rise in oil prices due to supply disruptions and geopolitical tensions have harmed importers like India.
Releasing the Update at the IMF headquarters in Washington, he said: “We continue to project global growth rates of just about 3.9 per cent for both this year and next, but judge that the risk of worse outcomes has increased, even for the near term.”
The report said that for such a scenario the “possible triggers include rising trade tensions and conflicts, geopolitical concerns, and mounting political uncertainty”. Citing the tariff increases by the US and retaliation by other countries, it said they “could derail the recovery and depress medium-term growth prospects”.