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India becoming one of world’s fastest growing economies: IMF

India’s growth rate is expected to rise to 7.5 per cent this year and next, making it one of the fastest growing economies in the world, according to the IMF’s latest economic health check.

The other Asian giant China’s economy is slowing to a more sustainable pace – 6.8 per cent GDP growth in 2015, and 6.3 per cent in 2016, according to the International Monetary Fund’s Regional Economic Outlook for Asia and the Pacific.

Growth in Asia and the Pacific will continue to outperform the rest of the world, and is expected to remain steady at 5.6 per cent in 2015, easing slightly to 5.5 per cent in 2016, said the report released Thursday. Growth will be driven by domestic demand, underpinned by healthy labour markets, low interest rates, and the recent fall in oil prices.

The global recovery, while moderate and uneven, will continue to support Asia’s exports, says the report.

The IMF’s Regional Economic Outlook calls for a strong push for structural reforms across most, if not all, economies in the region.

The report notes that in addition to boosting productive capacity, structural reforms can help rebalance growth toward consumption, which remains a priority for some major Asian economies.

Major reform areas include measures to address supply-bottlenecks in India, state-owned enterprises, and financial liberalisation in China, and initiatives to raise services productivity, and labour force participation in Japan.

Maintaining flexible fiscal and monetary policies to effectively manage aggregate demand will remain important in the future, say the report’s authors.

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