IMF cuts India's GDP growth forecast to 7% for FY20

Washington DC: The International Monetary Fund (IMF) has cut its projection for India`s economic growth by 0.3 percentage points to 7 percent for the fiscal year 2019-20 owing to the "weaker-than-expected outlook" for the domestic demand.

The growth is expected to rise to 7.2 percent points in FY21, down by the projected growth rate of 7.5 in the earlier report.

"India`s economy is set to grow at 7.0 percent in 2019, picking up to 7.2 percent in 2020. The downward revision of 0.3 percentage point for both years reflects a weaker-than-expected outlook for domestic demand," the International Monetary Fund (IMF) said in its World Economic Update.

Similarly, the global growth forecast for FY20 has been cut down by 0.1 percent points to 3.2. This is the fourth consecutive time that the global growth forecast has been lowered.

Among the factors cited by the report for the lower growth forecast includes increased trade and technology tensions between the United States and China, prolonged uncertainty on Brexit, and weaker-than-expected activity in emerging market and developing economies.

"Among emerging market and developing economies, the first-quarter GDP in China was stronger than forecast, but indicators for the second quarter suggest a weakening of activity. Elsewhere in emerging Asia, as well as in Latin America, activity has disappointed," the report read.