Source: Livemint.com, Jan 22, 2019.
NEW DELHI: India will grow at a world-beating 7.5% in 2019-20 amid slower global expansion, the International Monetary Fund (IMF) said, upgrading its October forecast of 7.4%. “India’s economy is poised to pick up in 2019, benefiting from lower oil prices and a slower pace of monetary tightening than previously expected, as inflation pressures ease,” IMF said in an update to its biannual World Economic Outlook (WEO) on Monday.
The review comes even as trade tensions and a weakening Europe cast a shadow over global growth.
IMF estimates India to grow 7.3% in 2018-19 and 7.7% in 2020-21. India’s contribution to world growth has risen from 7.6% during 2000-08 to 14.5% in 2018, according to IMF.
Without naming India, IMF said that in emerging markets and developing economies, where inflation expectations are well-anchored, monetary policy could provide support to domestic activity as needed.
With retail inflation slowing to an 18-month low of 2.19% in December—though services inflation remains elevated—many analysts believe the Reserve Bank of India’s (RBI) monetary policy committee will cut policy rates at its review meeting on 7 February.
“We will take necessary steps to maintain financial stability and to facilitate enabling conditions for sustainable and robust growth,” RBI governor Shaktikanta Das said in his first speech at the Vibrant Gujarat Summit on Friday after taking charge as the central bank’s 25th governor last month.