The International Monetary Fund on Thursday said India’s economic growth was much weaker than expected, and attributed it to factors such as “corporate and environmental regulatory uncertainty”.
Data released on August 30 showed that growth in Gross Domestic Product fell to a six-year low of 5% in the April-June quarter. According to the commerce ministry, growth in eight core sectors – coal, crude oil, natural gas, refinery products, fertiliser, steel, cement and electricity – dropped to 2.1% in July, compared to 7.3% growth in the same period last year.
“Recently, the latest GDP figures reflect a slow growth rate for India,” IMF spokesperson Gerry Rice said. “What’s the IMF’s assessment? Again, we’ll have a fresh set of numbers coming up but the recent economic growth in India is much weaker than expected, mainly due to corporate and environmental regulatory uncertainty and lingering weakness in some non-bank financial companies and risks to the outlook are tilted to the downside, as we like to say.”
He added that the IMF will be monitoring the numbers and will update the assessment in the upcoming World Economic Outlook.
In July, the International Monetary Fund had revised India’s growth forecast for 2019-’20 downward to 7%, from the 7.3% it had predicted in April. “India’s economy is set to grow at 7% in 2019, picking up to 7.2% in 2020,” the IMF had said in its July update to the World Economic Outlook. “The downward revision of 0.3 percentage point for both years reflects a weaker-than-expected outlook for domestic demand.”
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