Amid global slowdown, India's economy continues to clock fastest growth

"India's economy is poised to pick up in 2019, benefiting from lower oil prices and a slower pace of monetary tightening than previously expected, as inflation pressures ease," it said in the World Economic Outlook Update.

As the rest of the world slumps, India will continue to be the world's fastest growing major economy, said the report released in Davos on Monday.

The IMF's flagship report said India's growth is estimated to be 7.3 per cent in the current fiscal and forecast to rise to 7.7 per cent in 2020-21.

"Global expansion has weakened," it said. For 2018, the global growth is estimated at 3.7 per cent as in the October World Economic Outlook, despite weaker performance in some economies -- notably Europe and Asia.

The global economy is projected to grow at 3.5 per cent in 2019 and 3.6 per cent in 2020, 0.2 and 0.1 percentage point below last October's projections. The global growth forecast for 2019 and 2020 had already been revised downward in the last WEO, partly because of the negative effects of tariff increases enacted in the United States and China earlier that year.

The IMF said average oil prices are projected at just below 60 dollars per barrel in 2019 and 2020, down from about 69 dollars and 66 dollars respectively, in the last WEO.

For the United States, growth forecast remains unchanged. It is expected to decline to 2.5 per cent in 2019 and soften further to 1.8 per cent in 2020 with the unwinding of fiscal stimulus and as the federal funds rate temporarily overshoots the neutral rate of interest.

There is substantial uncertainty around the baseline projection of about 1.5 per cent growth in the United Kingdom in 2019-20. The unchanged projection relative to the October 2018 WEO reflects the offsetting negative effect of prolonged uncertainty about the Brexit outcome and the positive impact from fiscal stimulus announced in the 2019 budget.

In China, said the IMF report, economy will slow due to the combined influence of needed financial regulatory tightening and trade tensions with the United States. China's growth slipped from 6.6 per cent last year to 6.2 per cent this year.