The International Monetary Fund has released the results of its annual assessment of the Indian economy, with predictions for 2018-19 and 2019-20. Here’s what the IMF numbers tell us: (1) There’s no change in the forecast for India GDP growth—it remains 7.3% for the current fiscal year and 7.5% for 2019-20. (2) The composition of this growth is interesting: gross investment as a percentage of GDP is projected to jump from 30.6% in FY18 to 32.2% this year. (3) The IMF predicts that growth in merchandise exports will be a strong 13.2% this fiscal year. (4) This increase in growth is expected to lead to a rise in consumer price inflation to an average of 5.2% this fiscal. (5) Economic growth will lead to a rise in money supply, which is expected to go up by 11.4% this fiscal. (6) Savings as a percentage of GDP is forecast to increase, but not to the same extent as investment. (7) One reason for the higher savings figure is that the IMF believes the general government fiscal deficit, including that of the states, will be 6.6% of GDP, compared to 7% last fiscal. (8) The percentage growth in imports too is expected to be lower this year. (9) IMF thinks that foreign direct investment will rebound this year, after a drop last fiscal. (10) Having said all this, IMF emphasizes that “risks are tilted to the downside from external factors, such as higher global oil prices and tighter global financial conditions, as well as domestic financial vulnerabilities”.

(Live Mint)