The International Monetary Fund (IMF) has forecast India's economic growth to remain at 7.5 per cent in 2016 against China with an economic growth of 6.8 per cent. Even though India lowered its current year global economy growth to 3.3 per cent, it will beat China for the second consecutive year.


Indian Economic Growth to beat China's


IMF retained India's growth projection in its World Economic Outlook Update, for the current year at 7.5 per cent and that of China at only 6.8 per cent. For the next year, it has forecasted a growth rate of 7.5 per cent for India and 6.3 per cent for China. China was the fastest growing economy with a growth rate of 7.4 per cent in 2014, and that of India was 7.3 per cent.

According to Reserve Bank of India and Indian Finance Ministry, the estimates for the growth projection of India is higher than that forecasted by IMF. The Finance Ministry expects GDP growth to be 8 - 8.5 per cent for FY16. And The Reserve Bank Of India estimates is 7.6 per cent.

IMF estimated a lower global growth rate for India of 3.3 per cent for 2015. But for the year 2016 it has been confined to 3.8 per cent.

"Global growth is projected at 3.3 per cent 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 per cent," the report said.

The continued growth slowdown casts several factors, including bottlenecks, lower commodity prices, and tighter external financial conditions, structural, and economic distress related to geopolitical factors and rebalancing in China.

The estimation of the growth in emerging markets and developing economies is 4.2 per cent in 2015. For the year 2017, IMF has forecasted a growth rate of 6.0 per cent.

A slowdown in growth is primarily led by a downturn in real estate investment, a development that is intrinsically desirable. China will use monetary and fiscal policies to prevent too sharp a downtrend.


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