India to pull down global growth:IMF

India to pull down global growth:IMF

According to the forecast of IMF, economic growth of India is 4.8 per cent which is comparatively lower than what they expected and they blamed India . The estimation of economic growth of the world is also lower .The IMF projection 1.3 percentage point lower than the its earlier estimates is less than the five per cent projected by the official advance estimates.

The main reason of the lower economic growth is advance estimates have over calculated India’s growth figures for 2019-2020.the projected economic growth which is forecasted by the IMF is 5.8 per cent next year which is 1.2 percentage point less than its earlier forecast.it is also forecast the economy to grow by 6.5 per cent in 2021-22 which is 0.9 percentage point lower than earlier projections.

As per the estimate of IMF the world economic growth is 1.9 per cent which is 0.1 percentage point lower than its earlier forecast.similarly, it projected the global economy to grow by 3.3per cent in the current calendar year, which is 0.1 percentage point lower than previous estimates and 3.4 per cent in 2022,which is 0.2 percentage point below its earlier estimates.

The downward revision that creates negative impact to the economic activities especially India which led to reassessment of growth  prospects over the next two years. the downward revision of Indian economy leads to decline of domestic demand sharply especially in non bank financial sector and a decline in  credit growth.

According to the opinion of IMF chief economist Gita Gopinath , the biggest  contributor to the revision of global economic growth  is india, where growth slowed sharply owing to stress  in the non banking financial sector and weak-rural income growth.

She also reveals that pick-up in in global growth of 2020 remains highly uncertain and it is mainly depend on improved growth of stressed economies  such as Argentina, Iran, Turkey and for under-performing emerging and developing economies such as Brazil, India and Mexico.

The advance estimates are mainly for budget numbers and if economist do prove correct, the budget numbers would also turn out to be erroneous. the IMF

and world bank expected India to grow by 5.8 per cent in the next financial year, the fund is more ambitious than the bank  in its estimation of india’economic growth in 2021-22