IMF retains economic growth projection for India at 7.3% for FY19

The International Monetary Fund (IMF) on Monday retained economic growth projection for India at 7.3 per cent for 2018-19 (FY19), lower than the government’s and the Reserve Bank of India’s (RBI’s) forecasts. This is, however, noteworthy as the IMF cut global growth projections by 0.2 percentage points.

In its World Economic Outlook (WEO), the IMF said foreign exchange interventions should be limited to address disorderly market conditions, something which RBI Governor Urjit Patel also talked about. The IMF wants the RBI to tighten monetary conditions, something which it did not do in the October policy review.

For the next year (FY20), the IMF lowered India’s growth projections by 0.1 percentage points to 7.4 per cent.

As such, the IMF does not see India’s growth reaching 7.5 per cent even in FY19. However, the RBI pegged India’s growth projections at 7.5 per cent. The government expected the rate to exceed 7.5 per cent this year on the back of 8.2 per cent growth rate in the first quarter. India’s economy grew 6.7 per cent in FY18.