India is also doing better than the once-roaring Asian tigers of the ASEAN, whose economic growth was estimated at 4.7 per cent last year and is projected to increase to 4.8 per cent this year and 5.1 per cent next year, the IMF said. "A more subdued growth forecast for India accounts for the lion's share of the downward revisions," the IMF said.ĭespite the cuts for India, it is the second-fastest growing major economy after China this year and the next, and it is expected to overtake China in 2021, according to the WEO update.Ĭhina's growth rate projections are 6.1 per cent for 2019, 6 per cent in 2020 and 5.8 per cent in 2021. It also cut the global economic projections for 2021 by 0.2 per cent to 3.4 per cent. The WEO update blamed India's economic slowdown for a "lion's share" of the 0.1 per cent cut in the global economic growth projections for last year to 2.9 per cent and to 3.3 per cent for the current year from those made in October.
"In addition to that, there was weak rural income growth and that has also affected domestic demand," she said. An important reason for this is the stress in the financial sector, particularly in the non-bank financial sector, because of which there has bee a sharp slowing of credit growth."
She said, "In India, relative to the numbers we had projected in October, the first two fiscal quarters of the fiscal year 2019-20 (that) came in much weaker than expected. The forecasts for the next two fiscal years, although showing an upward trend, are lower than the 7 per cent for 2020-21 and the 7.5 per cent for 2021-22 made by the IMF in October.Īsked at the interactive video news conference about the sharp cuts, Gopinath gave two reasons for the reassessment.