Breaking News

You are here » Indian-Commodity  :  Economy  :  India to be fastest growing economy in 2018: IMF


India to be fastest growing economy in 2018: IMF

With India's medium-term prospects remaining positive, the International Monetary Fund (IMF) in its latest Asia and Pacific Regional Economic Outlook report has restated that the country will be the fastest growing major economy in 2018, with a growth rate of 7.4%, and will grow further to 7.8% in 2019. It also said that the nation was recovering from the effects of demonetisation and the introduction of the Goods and Services Tax, and this recovery is expected to be supported by a rebound from transitory shocks as well as robust private consumption.

According to the report, medium-term consumer price index inflation is forecasted to remain within but closer to the upper bound of the Reserve Bank of India's inflation-targeting band of 4% with a (+/-) 2% change. But, it also expresses caution that with increased inflation pressure in India, monetary policy should maintain a tightening bias. It added that the consumer price increase in 2017 was 3.6% and projected it to be 5% in 2018 and 2019. Besides, the current account deficit in FY18 is expected to widen somewhat but should remain modest, financed by robust foreign direct investment inflows.

The report also showed that Bangladesh will be the fastest-growing economy in South Asia, after India, with growth rates of 7% for 2018 and 2019; Sri Lanka is projected to grow at 4% in 2018 and 4.5% in 2019, and Nepal 5% in 2018 and 4% in 2019, while Pakistan, which is grouped with the Middle East, is not covered in the Asia report. Besides, China is expected to grow 6.6% in 2018 and 6.4% in 2019. Overall, Asia continues to be both the fastest-growing region in the world and the main engine of the world's economy.

IMF has said that US President Donald Trump's fiscal stimulus is expected to support Asia's exports and investment, while the Asian region's growth rate was expected to be 5.6% for 2018 and 2019. However, in the medium term, it said that downside risks dominate for the region and these include a tightening of global financial conditions, a shift toward protectionist policies, and an increase in geopolitical tensions. With these uncertainties the IMF urged the countries in the region to follow conservative policies aimed at building buffers and increasing resilience and push ahead with structural reforms.

Related News

View all news

CPI inflation hits 6-month high of 2.92% in April

India's retail inflation based on Consumer Price Index (CPI) continued northward journey for third straight month and inched up to a 6-month high of 2.92% in April 2019 due to a spike in food prices, including......

Indian economy to grow at 7% range in current fiscal: Subramanian

Chief Economic Advisor (CEA) Krishnamurthy V. Subramanian has said  that the Indian economy would grow at 7% range in the current financial year (FY20) powered by the effects of the strong structural......

Banks take 57% haircut in 94 cases resolved in FY19: ASSOCHAM-CRISIL study

A joint study carried out by the industry body Associated Chambers of Commerce & Industry of India (ASSOCHAM) and rating agency CRISIL stated that banks have taken a huge 57% haircut in the 94......

Top News

View all news

SRF, NIIT Technologies and United Bank of India to see some action today

SRF has entered into a definitive agreement to sell its Engineering Plastics Business to DSM, the Life Sciences and Materials Sciences Company in an all-cash transaction, amounting to Rs 320 crore. The......

NIIT Technologies concludes sale of 88.99% stake in ESRI India Technologies

NIIT Technologies has concluded the sale of 88.99% equity shares in ESRI India Technologies, India to Environment Systems Research Institute Inc., USA. Consequent to above sale, ESRI India Technologies,......

United Bank of India to raise Rs 1,500 crore by various means

United Bank of India has received approval to raise equity capital not exceeding Rs 1,500 crore in one or more tranches during the financial year by way of Qualified Institutions Placement, Public Issue,......