IMF trims India’s growth forecast to 7.2 per cent for 2017
In the latest World Economic Outlook (WEO), International Monetary Fund (IMF) has cut down India’s growth forecast for year 2017 by 0.4 percentage points to 7.2 %.
- For Fiscal Year 2016-17, it has pegged India’s growth at 6.8%. The report states that demonetisation drive by the Govt., affected the cash flow in the system and disrupted the consumption pattern in India.
- However, as per the report, India’s growth prospects in medium term are favourable. If reforms are carried out as per the plans and supply-side concerns are addressed, India’s growth rate is expected to be 8% in the medium term.
Following Policy Reforms have been suggested for India:
- Expanding the manufacturing base
- Providing easy entry and exit for businesses
- To reduce labour and product market irregularities
- To productively employ abundant labour force
- As per the WEO, global economy is expected to grow at 5% in 2017 as compared to 3.1% in 2016.
- US economy is expected to grow at 3% in 2017 as compared to 1.6% in 2016.
- Chinese economy will grow at 6% and along with India and Russia it will be the flag bearer for growth in emerging markets.
- Overall, global economy is on an upswing and positive trend has been observed in trade, investment and manufacturing.
- IMF has cautioned world leaders to refrain from raising trade barriers. It believes that such inward-looking policies may jeopardize the global economic recovery process.
World Economic Outlook Report:
- World Economic Outlook (WEO) is published by the International Monetary Fund. It is published biannually and is also updated twice in between.
- It provides short term and medium term growth projections for global economy as a whole and also for 180 countries separately. It provides forecasts for key macroeconomic indicators viz. inflation, fiscal deficit and trade deficit.