Washington: India will be the world's fastest growing economy for the second consecutive year in 2016 at 7.5%, IMF on Thursday said, even as it lowered its current year global economy growth forecast to 3.3%.
In its World Economic Outlook Update released in Washington, IMF retained India's growth projection for current year at 7.5% which will be higher than China's 6.8%. It forecast a growth rate of 7.5% for India in 2016 as well, as against China's 6.3%.
China was the fastest growing economy in 2014 at 7.4% as against India's 7.3%, as per the IMF data. IMF's growth projection for India, however, is lower than the estimates of the Indian Finance Ministry and the Reserve Bank of India. The Finance Ministry expects GDP growth to be 8-8.5% in 2015-16, while the Reserve Bank of India has estimated it at 7.6%.
For India, IMF follows data for fiscal year ending March while for other countries it considers the December-ending periods.
In case of both India and China, IMF has retained the projection made earlier in April, while it has lowered global growth forecast from 3.5% to 3.3% for 2015.
The global growth projection for 2016 has been retained at 3.8%.
"Global growth is projected at 3.3% in 2015, marginally lower than in 2014, with a gradual pickup in advanced economies and a slowdown in emerging market and developing economies. In 2016, growth is expected to strengthen to 3.8%," the report said.
In emerging market economies, it said the continued growth slowdown reflects several factors, including lower commodity prices and tighter external financial conditions, structural bottlenecks, rebalancing in China, and economic distress related to geopolitical factors.
A rebound in activity in a number of distressed economies is expected to result in a pickup in growth in 2016.
Growth in emerging market and developing economies has been estimated at 4.2% in 2015, down 0.1% from the projection made April.
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