The International Monetary Fund (IMF) in its October World Economic Outlook (WEO) has lowered India’s economic growth forecast at 6.7% in 2017 and 7.4% in 2018.
It is slower than 0.5 and 0.3 percentage points projected earlier by IMF. In April 2017 forecast, IMF had revised upwards India’s growth performance for 2016 to 7.1% as opposed to 6.8%
The report has cited impact of demonetisation and implementation of Goods and Services Tax (GST) for expected slowdown during the current and the next year. It also held that India’s slowdown is happening even as the world economy is picking up steam. But it expects revival of growth in future due to structural reform.
India will regain fastest growing major economy tag next year when it is forecast to grow 7.4%, slower than earlier estimate of 7.7% but higher than China’s 6.5%. It also expects that the Indian economy to grow 8% in the medium term on the back of reforms undertaken so far.
IMF forecast is latest in series of downgrades in India’s growth prospects unveiled by other multilateral agencies such as World Bank, Asian Development Bank (ADB) and OECD. Earlier, RBI had lowered its growth forecast for 2017-18 to 6.7% from 7.3%.
World Economic Outlook (WEO)
The WEO is survey conducted and published by IMF. It is published biannually and partly updated two times a year. It portrays the world economy in the near and medium context, with growth projections for up to four years into the future. WEO forecasts include key macroeconomic indicators, such as GDP, inflation, fiscal balance and current account of more than 180 countries around the globe. It also deals with major economic policy issues.