IMF revises 2014 growth forecast upwards to 5.6%

The IMF’s flagship World Economic Outlook (WEO) report, however, left its projection for India’s 2015 GDP growth unchanged at 6.4 per cent. The report said growth in India is likely to increase in the remaining period of 2014 as well as in the entire 2015 because exports and investment will continue to pick up and more than offset the effect of an unfavorable monsoon on agricultural growth earlier in the year.

However, the Washington DC-based global body said India should ensure an improvement in investment conditions, remove infrastructure bottlenecks in the power sector.

“India has recovered from its relative slump, thanks in part to effective policies and a renewal of confidence, growth is expected to exceed 5 per cent (from 4.7 per cent in 2012 and 5 per cent in 2013),” IMF chief economist Olivier Blanchard said ahead of the annual meetings of the IMF and the World Bank Group. Earlier, the World Bank had said that the Indian economy was set to grow by 6.4 per cent in 2015-16 and 5.6 per cent in 2014-15.

With economic activity buoyed by expectations from the new elected government , “India is benefiting from a ‘Modi dividend’,” the Bank said on Monday.