IMF cuts India's growth forecast to 6.1 per cent

New Delhi, October 15 (PTI): The International Monetary Fund on Tuesday slashed India's GDP growth projection for the year 2019 to 6.1 per cent, which is 1.2 per cent down from its April projections.

The IMF in April said India will grow at 7.3 per cent in 2019. 

However, three months later it projected a slower growth rate for India in 2019, a downward revision of 0.3 per cent.

As against India's real growth rate of 6.8 per cent in 2018, the IMF in its latest World Economic Outlook projected India's growth rate at 6.1 per cent in 2019 and noted that the Indian economy is expected to pick up the next year at 7.0 per cent in 2020.

On Sunday, the World Bank in its latest edition of the South Asia Economic Focus said India's growth rate is projected to fall to 6 per cent in 2019 from 6.9 per cent of 2018.

The downward revision relative to the April 2019 WEO of 1.2 percentage points for 2019 and 0.5 percentage point for 2020 reflects a weaker-than-expected outlook for domestic demand, the IMF said.

"Growth will be supported by the lagged effects of monetary policy easing, a reduction in corporate income tax rates, recent measures to address corporate and environmental regulatory uncertainty, and government programs to support rural consumption," the IMF said.

China, whose GDP grew at 6.6 per cent in 2018, is now projected to grow at 6.1 per cent in 2019 and 5.8 per cent in 2020, it said.

"India's economy decelerated further in the second quarter, held back by sector-specific weaknesses in the automobile sector and real estate as well as lingering uncertainty about the health of nonbank financial companies," said the World Economic Outlook released ahead of the annual meeting of the IMF and the World Bank.