IMF drastically cuts India’s GDP growth estimate. Growth rate will be just 4.8 percent
The International Monetary Fund has drastically reduced estimates of growth in the Indian economy. The IMF has said that India’s gross domestic product (GDP) growth rate in FY 2019-20 will be just 4.8 percent.
- IMF has slashed India’s GDP growth estimate.
- In 2019-20 India’s GDP growth is projected to grow by just 4.8%.
- India’s growth forecast has to be reduced due to sluggishness in India.
- IMF released estimates during World Economic Forum meeting
The International Monetary Fund (IMF) has drastically reduced estimates of growth in the Indian economy. The IMF has said that the growth rate in India’s gross domestic product (GDP) in the financial year 2019-20 will be just 4.8 percent. The IMF said that due to sluggishness in India and other emerging countries like it, the growth forecast of the world had to be reduced.
However, the IMF has also expressed hope that the US-China trade deal will soon improve the manufacturing activities of the world. The IMF has also said that by the year 2020, the Indian economy can grow 5.8 per cent and further improve to 6.5 per cent in 2021.
How much will increase in global GDP
The IMF has released estimates of growth of 2.9 percent in the world economy in 2019 and 3.3 percent in 2020. According to the IMF, in 2021, the pace of the global economy will increase further and it may grow by 3.4 per cent.
Why the slowness
The IMF released this estimate during the ongoing World Economic Forum (WEF) meeting in Davos. Earlier, the IMF had released an estimate of 6.1 percent growth in the current financial year. The IMF’s World Economic Outlook report states that domestic demand has fallen sharply due to difficulties in India’s non-banking financial sector and the pace of credit growth has slowed.
Significantly, the International Monetary Fund (IMF) chief economist Geeta Gopinath recently warned that the IMF may significantly reduce its estimate of India’s growth in January. In an event, Gopinath said, “We will revise our figures and release new figures in January.” This can be reduced significantly in the case of India.
Skeptics on the $ 5 trillion economy goal
With this, Gopinath expressed doubt on the government’s goal of $ 5 trillion economy. He said that to achieve this target, India would have to achieve GDP growth of 10.5 per cent at market price as against the growth rate of 6 per cent in the last 6 years. At the same time, to achieve this target in terms of stable value, an increase of up to 9 percent is necessary.
6 year low GDP
India’s GDP growth reached 4.5 percent in the September quarter. This is a lower level of 6 years. At the same time, the growth rate has been declining for 6 consecutive quarters. Not only this, the situation is not looking good in the future either. Several rating agencies, including Moody’s, have cut India’s growth rate estimates.
