The IMF has also revised downwards the growth outlook for the global economy. (Photo Credit: File/Representational)
International Monetary Fund (IMF) on Monday lowered India's growth estimate for 2019 to 4.9 per cent. The IMF, however, said that the economic growth of the country will improve in 2020 and 2021. The growth will improve to 5.8 per cent in 2020 and then 6.5 per cent in 2021. The IMF also revised downwards the growth outlook for the global economy and flagged fundamental issues of reform in trade systems.
"The growth markdown largely reflects a downward revision to India’s projection, where domestic demand has slowed more sharply than expected amid stress in nonbank financial sector and a decline in credit growth,” according to the World Economic Outlook report.
IMF's Chief Economist Gita Gopinath said some risks have partially receded since October with developments on US-China trade deal. The slight downward revision of 0.1 per cent for two years and 0.2 per cent for the year after that in the global growth is largely due to downward revision for India estimates, she said.
Ahead of the inaugural of the World Economic Forum (WEF) annual summit in Dovsas, IMF Managing Director Kristalina Georgieva said the fund's simplest advice to policymakers is that they should keep doing what works. She cautioned that everyone must be ready to act again and immediately in a coordinated manner if growth begins to slow down again.
Noting that a turning point is yet to be reached, the IMF said it was slightly revising downwards the growth outlook for the global economy. Fundamental issues of reform in trade systems are still there and we have seen there have been some developments in the Middle East, Georgieva said.