Washington: The International Monetary Fund (IMF) projected a slower growth rate for India in 2019 and 2020, a downward revision of 0.3% for both the years, saying its GDP will now grow respectively at the rate of 7 and 7.2% reflecting a weaker-than expected outlook for domestic demand.
However, India will still be the fastest growing major economy of the world and much ahead of China, the Washington-based global financial institution said.
This is a downward revision of 0.3% for both the years as compared to the IMF's previous projections early this year, it said.
“India's economy is set to grow at 7.0% in 2019, picking up to 7.2% in 2020. The downward revision of 0.3 percentage point for both years reflects a weaker-than expected outlook for domestic demand," the IMF said.
In China, 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 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 relative to the April World Economic Outlook (WEO) projection, the IMF said.
IMF's Indian-origin Chief Economist Gita Gopinath said the IMF is revising downward its projection for global growth to 3.2% in 2019 and 3.5% in 2020.
"While this is a modest revision for both years relative to our projections in April, it comes on top of previous significant downward revisions. The revision for 2019 reflects negative surprises for growth in emerging market and developing economies that offset positive surprises in some advanced economies," she said.