The International Monetary Fund (IMF) has lowered India’s GDP growth forecast for 2013 to 5.9 per cent from 6 per cent earlier and kept it unchanged for 2014 at 6.4 per cent. It estimated growth in the 2012 calendar year at 4.5 per cent, down from the previous projection of 5.4 per cent.
In an update to its World Economic Outlook (WEO) released on Wednesday, IMF projected global growth to pick up during 2013, as factors underlying soft global activity are expected to subside.
IMF also said the global growth is expected to reach 3.5 per cent this year, higher than the estimated 3.2 per cent.
A further strengthening to 4.1 per cent is projected for 2014, assuming recovery takes a firm hold in the euro area economy.
IMF said the space for further policy easing has diminished, while supply bottlenecks and policy uncertainty have hampered growth in some economies for example, Brazil and India.
Observing that economic conditions improved modestly in the third quarter of 2012, with global growth increasing to about 3 per cent, the IMF report said the main sources of acceleration were emerging market economies, where activity picked up broadly as expected, and the United States, where growth surprised on the upside.
Growth in emerging
markets and developing economies has been pegged at 5.5 per cent in 2013.
IMF said acute financial crisis risks are now somewhat lower, but renewed setbacks in the euro area and the risk of excessive near-term fiscal consolidation in the US could derail global growth.