The International Monetary Fund (IMF) has cut its projection for India’s economic growth by 0.3 percentage point to 7 per cent for 2019-20 due to subdued domestic demand. For the next financial year, the projection was also cut by 0.3 percentage point to 7.2 per cent. “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,” IMF said in its update on its flagship report — the World Economic Outlook. IMF did not give details of muted domestic demand, but various sectors of the economy have been witnessing a slowdown, particularly auto. India will continue to be the fastest growing large economy in the world. The closest competitor, in terms of growth. IMF noted that a number of central banks, including RBI, have turned dovish or communicated a more cautious view on the outlook. Earlier in June, RBI had cut the repo rate by 25 basis points for the third time in a row.

(Business Standard)