Days after the World Bank cut India’s growth forecast, the International Monetary Fund (IMF) followed suit, by lowering the projections to 6.1 per cent, down from 7.3 per cent it had projected in April this year.
As against India’s real growth rate of 6.8 per cent in 2018, the IMF in its latest World Economic Outlook projected India’s growth rate at 6.1 per cent in 2019 and noted that the economy is expected to pick up the next year at 7 per cent in 2020.
On Sunday, the World Bank in its latest edition of the South Asia Economic Focus said India’s growth rate is projected to fall to 6 per cent in 2019 from 6.9 per cent of 2018.
“Growth will be supported by the lagged effects of monetary policy easing, a reduction in corporate income tax rates, recent measures to address corporate and environmental regulatory uncertainty, and government programs to support rural consumption, the IMF said.
In the last few months, the Centre had unleashed a slew of measures, including a cut in corporate tax, besides roll back of several budget measures, to revive the economy that has been undergoing a slowdown.
Growth has slumped to 5% in the first quarter of 2019-20 on the back of a massive drop in vehicle sales and fall in exports.
“India’s economy decelerated further in the second quarter, held back by sector-specific weaknesses in the automobile sector and real estate as well as lingering uncertainty about the health of nonbank financial companies,” said the World Economic Outlook released ahead of the annual meeting of the IMF and the World Bank.
China, whose GDP grew at 6.6 per cent in 2018, is now projected to grow at 6.1 per cent in 2019 and 5.8 per cent in 2020, the IMF said.