NEW DELHI: India will not have to surrender its fastest growing major economy tag to China in the near future and will record slightly higher growth rate than its bigger neighbour for last year despite a slowdown due to demonetisation, International Monetary Fund says.
World Economic Outlook (WEO), the fund's flagship publication, has revised upwards India's growth forecast for FY17 to 6.8 per cent, just ahead of China's 6.7 per cent for 2016 calendar. IMF has retained its India growth forecast for FY18 at 7.2 per cent and FY19 at 7.7 per cent, well ahead of its forecast for China.
In its January review, the Fund had slashed India's growth estimate to 6.6 per cent for FY17, below China's growth rate for 2016, citing demonetisation disruptions.
According to WEO, the global economy is expected to do better with 3.5 per cent growth in 2017 against 3.1 per cent in 2016 on the back of better growth in the US and the emerging market pack, but Euro zone is likely to continue to grow at current pace.
"Global economic activity is picking up with a long awaited cyclical recovery in investment, manufacturing, and trade," IMF said in the report even as it warned that structural impediments to stronger recovery remain, and balance of risk remains on downside.