IMF Cuts Global Growth Forecast As China Slows.
The International Monetary Fund (IMF) on Tuesday kept its growth forecast for India unchanged at 7.5% in 2016-17 even as it lowered its global growth projection in an update to the World Economic Outlook (WEO) released in October. “India and the rest of emerging Asia are generally projected to continue growing at a robust pace, although with some countries facing strong headwinds from China’s economic rebalancing and global manufacturing weakness,” IMF said. In 2015-16, India is estimated to grow 7.3%. During the first half of the fiscal year 2015-16 (April-September), India’s economy grew 7.2%. Without naming India, IMF said policymakers in emerging market and developing economies need to press on with structural reforms to alleviate infrastructure bottlenecks, facilitate a dynamic and innovation-friendly business environment, and bolster human capital. The IMF cited a sharp slowdown in China trade and weak commodity prices that are hammering Brazil and other emerging markets. The Fund forecast that the world economy would grow at 3.4 percent in 2016 and 3.6 percent in 2017, both years down 0.2 percentage point from the previous estimates made last October. It said policymakers should consider ways to bolster short-term demand. While rating agency S&P said Anaemic demand and high debt are the main constraints for credit profiles of Indian companies as overall economic conditions remain lacklustre in the country.