IMF projects India's GDP at 6.4% in 2015 | business | Hindustan Times
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IMF projects India's GDP at 6.4% in 2015

business Updated: Oct 07, 2014 21:52 IST

The IMF on Tuesday forecast 5.6% growth rate for India this year and a higher 6.4% in 2015, citing renewed confidence in the market due to a series of economic reforms being undertaken by the new government.

"Growth in India is expected to rise to 5.6% in 2014 and pick up further to 6.4% in 2015 as both exports and investment increase," the International Monetary Fund said in its latest World Economic Outlook report released in Washington on Tuesday.

In 2013, India's growth rate was five per cent. On the other hand in China, growth will remain at 7.4% in 2014 and is projected to be of 7.1% in 2015.

According to the WEO, after a slowdown in the first half of 2014, global growth is forecast to strengthen to 3.5% in the second half of 2014 and 3.8% in 2015.

But growth is uneven and still weak overall and remains susceptible to many downside risks.

The IMF said global growth slowed more than expected from an annualised rate of 3.9% in the second half of 2013 to 2.7% in the first half of 2014.

"Although the downside surprise was mainly owing to temporary factors, particularly for the US economy, it also reflected a weaker recovery in the euro area, as the region continued to overcome the legacies of the crisis, and in Japan, where the negative effects on demand of the consumption tax increase were greater than previously expected," it said.

Among emerging market and developing economies, growth in China picked up in the second quarter, responding to the measures deployed to boost activity after a weaker-than-expected first-quarter out-turn.

However, domestic demand remained weak in a few major economies, notably in Latin America.

Geopolitical tensions related to the Russia-Ukraine situation and the Middle East dampened activity in those regions, but with limited broader spillovers so far, the report said.

Advanced economies, the report said, are expected to continue a slow recovery, with growth rising to 1.8% this year and to 2.3% in 2015.

Growth in emerging market and developing economies will slow to 4.4% in 2014, before rising to 5.0% in 2015, it said.

"The forecast is weaker than projected in the April 2014 WEO, reflecting the negative growth surprises in the first half of the year, a more subdued pace of domestic demand growth in some emerging," the report said.