FMI has projected India’s growth at 7.4 per cent in 2018

The International Monetary Fund has projected India’s growth at 7.4 per cent in 2018 as against China’s 6.8 per cent, making it the fastest growing country among emerging economies following last year’s slowdown due to demonetisation and the implementation of the GST. This comes a day before Prime Minister Narendra Modi’s address at the SWorld Economic Forum in Davos. In its latest World Economic Outlook (WEO) update released on Monday, the IMF has projected a 7.8 per cent growth rate for India in 2019. Growth rate projections for both 2018 and 2019 remains unchanged since its October 2017 WEO projections. The IMF said that China, during the same period is expected to grow at 6.6 per cent and 6.4 per cent respectively. The IMF said, the aggregate growth forecast for the emerging markets and developing economies for 2018 and 2019 is unchanged, with marked differences in the outlook across regions. It projected India to grow at 7.4 per cent in 2018 as against China’s 6.8 per cent. Emerging and developing Asia will grow at around 6.5 per cent over 2018–19, broadly the same pace as in 2017,” it said, adding that the region continues to account for over half of world growth. “Growth is expected to moderate gradually in China (though with a slight upward revision to the forecast for 2018 and 2019 relative to the fall forecasts, reflecting stronger external demand), pick up in India, and remain broadly stable in the ASEAN-5 region”, the IMF said. In the year gone by, China (6.8 per cent) was ahead of India (6.7 per cent), giving China the tag of being the fastest growing emerging economies, as has been the case for major parts of the past several decades. Notably, with a growth rate of 7. 1 per cent, India was the fastest growing country among emerging economies in the year 2016. But due to the demonetisation in late 2016 and implementation of the Goods and Services Tax (GST), India’s economy slowed down a little bit to 6.7 per cent in 2016. In 2017, India’s growth rate dropped to 6.7 per cent. According to Maurice Obstfeld, IMF Economic Counsellor and Director of Research, the two biggest national economies driving current and near-term future growth are predictably headed for slower growth.