In its World Economic Outlook report the International Monetary Fund said that India should grow at 7.3 percent in 2018-2019, up from 6.7 percent last year but lower than its earlier projection of 7.4 percent in April this year. The projection was revised down due to the increase in global oil prices and tightening global financial conditions.
For 2019-20, India’s growth is projected to be at about 7.4 percent, on the back of the rebound from the shocks of demonetization and the goods and services tax (GST), and improving private consumption and investment climate.
In comparison, China is expected to grow at 6.6 percent in 2018 and 6.2 percent in 2019. China’s growth projections have been lowered in part due to the impact of U.S. trade tariffs hitting Chinese exports and slowing external demand growth, and due to financial regulatory tightening, according to the report.
IMF cautioned that India’s inflation rate is expected to increase to 4.7 percent in 2018-19 compared to 4.5 percent in 2016-17 because of rising fuel prices, the weakening rupee, and accelerating demand; it has called for a tighter monetary policy.
