Business
India set to grow faster than China at 7.5 percent: IMF
By
Arun KumarWashington, July 9
Keeping its projections for
India and China unchanged, the International Monetary Fund on Thursday
forecast that India will grow a clip faster at 7.5 percent in 2015 and
2016, overtaking a slowing down China.
While India's GDP growth
would go up from 6.9 percent in 2013 and 7.3 percent in 2014 to 7.5
percent over the next two years, China would slow down from 7.7 percent
in 2013 and 7.4 percent in 2014 to 6.8 percent in 2015 and 6.3 percent
next year, IMF said.
The July update of the April 2015 World
Economic Outlook (WEO) predicting a slower growth in emerging markets
and a gradual pickup in advanced economies projected global growth at
3.3 percent in 2015, marginally lower than in 2014.
In 2016,
growth is expected to strengthen to 3.8 percent, the report said
attributing the small downward revision to global growth for 2015 to a
setback to activity in the first quarter of 2015, mostly in North
America.
Nevertheless, the underlying drivers for a gradual
acceleration in economic activity in advanced economies "easy financial
conditions, more neutral fiscal policy in the euro area, lower fuel
prices, and improving confidence and labour market conditions" remain
intact, the report said.
In emerging market economies, the
continued growth slowdown reflects several factors, including lower
commodity prices and tighter external financial conditions, structural
bottlenecks, rebalancing in China, and economic distress related to
geopolitical factors, it said.
Growth in advanced economies is
projected to increase from 1.8 percent in 2014 to 2.1 percent in 2015
and 2.4 percent in 2016, a more gradual pickup than was forecast in the
April 2015 WEO.
The unexpected weakness in North America, which
accounts for the lion's share of the growth forecast revision in
advanced economies, is likely to prove a temporary setback, the update
said.
Growth in emerging market and developing economies is
projected to slow from 4.6 percent in 2014 to 4.2 percent in 2015,
broadly as expected.
In 2016, growth in emerging market and
developing economies is expected to pick up to 4.7 percent, largely on
account of the projected improvement in economic conditions in a number
of distressed economies, including Russia and some economies in the
Middle East and North Africa.
The projected pickup in global growth, while still expected, has not yet firmly materialised, according to the WEO update.
Raising
actual and potential output through a combination of demand support and
structural reforms continues to be the economic policy priority, the
report said.
Efforts at implementing structural reforms remain
urgent across advanced economies, both to tackle crisis legacies and to
raise potential output.
In emerging market and developing
economies, macroeconomic policy space to support demand is generally
more limited but should be used to the extent possible, the report said.
Structural
reforms to raise productivity and remove bottlenecks to production are
urgently needed in many economies, the update suggested.