New Delhi, Oct 9 (IEBusiness) The IMF has retained India’s growth at 7.3 per cent in 2018 and 7.4 per cent in 2019, given the recent increase in oil prices and the tightening of global financial conditions, up from 6.7 per cent in 2017.
According to the World Economic Outlook (WEO), important reforms have been implemented in recent years, including the Goods and Services Tax, the inflation-targeting framework, the Insolvency and Bankruptcy Code, and steps to liberalise foreign investment and make it easier to do business.
Looking ahead, renewed impetus to reform labour and land markets, along with further improvements to the business climate, are also crucial, the WEO noted.
According to IMF’s WEO October 2018, the steady expansion, which is underway since mid-2016, continues with global growth for 2018-19 projected to remain at its 2017 level.
Global growth is projected at 3.7 per cent for 2018–19—0.2 percentage point lower for both years than forecast in April.
Risks to global growth skew to the downside in a context of elevated policy uncertainty, according to release on Tuesday issued by PHD Research Bureau which compiled data from World Economic Outlook.
Global growth is expected to remain steady at 3.7 per cent in 2020, as the decline in advanced economy growth with the unwinding of the US fiscal stimulus and the fading of the favorable spillovers from US demand to trading partners is offset by a pickup in emerging market and developing economy growth.
Growth in advanced economies will remain well above trend at 2.4 per cent in 2018, before softening to 2.1 per cent in 2019.
For India, data and forecasts are presented on a fiscal year basis and GDP from 2011 onward is based on GDP at market prices with fiscal year 2011/12 as a base year.
Inflation is expected to rise this year across both advanced and emerging market and developing economies. In advanced economies, it is projected to pick up to 2 per cent in 2018, from 1.7 per cent in 2017. Inflation in emerging market and developing economies excluding Venezuela is expected to increase to 5.0 per cent this year from 4.3 per cent in 2017.
Core inflation is assumed to gradually decline to 2 per cent thereafter, with a monetary policy response that ensures expectations remain well anchored.
Monetary policy stances are projected to diverge among advanced economies. The US federal funds target is expected to increase to about 2.5 per cent by the end of 2018 and about 3.5 per cent by the end of 2019, the IMF said.