IMF: World economy upbeat, India to grow at a faster pace of 7.4 per cent

India soon to lead as the fastest growing economy in the world followed by China. IMF in their latest world economic outlook reiterated India’s growth forecast for 2018 at 7.4 per cent and 7.9 per cent for 2019. While, China is expected to grow at 6.8 per cent and 6.4 per cent for 2018 and 2019, respectively.

India grew at fastest pace in 2016 at 7.4 per cent growth rate, which was later slowed by demonetization and implementation of landmark tax policy of GST (Goods & Services Tax). However, a recovery is seen with manufacturing sector growing at the fastest pace in recent months. On the other hand, China the earlier growth bandwagon is forecasted to post slower growth due to the slowdown in the economy. China witnessed severe environmental problems resulting in massive capacity cut programmes across the industries. Also, the Chinese government has reviewed its credit policy due to mounting debt on the economy. Thus, IMF expects the economy to grow by 6.8 per cent for 2018.

Considering this, India is expected to see high inflow of investments through direct and institutional mode . Thus propelling the growth of the economy supported by favourable policy reforms by the government.

On the global front, IMF believes world economy was in a bright spot and cited that US tax cuts would boost investments in the world's largest economy and its trade partners. Developing Asian economies are expected to grow at 6.6 per cent for 2019, largely led by strength in India’s economic growth.

Taking the cue from IMF’s economic outlook, Asian markets are performing well across the board. Indian markets traded at an all-time high with Sensex breaching the 36,000 mark, up by 0.62 per cent , similarly Japan’s Nikkei was up 1.25 per cent , Hong Kong’s Hang Seng was up 1.05 per cent and Korea’s Kospi was up by 1 per cent