IMF cuts India's growth projection, but it still retains world's top spot
United Nations, July 16 : The International Monetary Fund (IMF) cut India's growth projections for this fiscal year to 7.3 per cent and for the next to 7.5 per cent on Monday, although the country will still retain its top spot in the global growth league.
But "India's growth remains quite robust into the future; it is down but growing very strongly", said Maury Obstfeld, the director of the IMF's Research Department.
The World Economic Outlook (WEO) Update reduced by 0.1 per cent the projections made in April for this year and by 0.3 per cent for 2019.
At the news conference to release the report in Washington, Obstfeld explained the downgrade by saying that while the main factor is the rise in oil prices, "the general tightening in general global financial conditions is (also) playing a role in affecting India's growth".
Gian Maria Milesi-Ferreti, the deputy director of the Research Department, added that another element that went into the downgrade was "the rising inflationary pressures".
"Monetary policy has tightened; it's a bit tighter than under our forecast in April and that adds to oil and tighter global financial conditions in taking a little bit off growth for next year," he said.
Obstfeld said that although some factors have negatively impacted the global growth since April, they were not significant enough to reduce the projection.
"We continue to project global growth rates of just about 3.9 per cent for both this year and next, but judge that the risk of worse outcomes has increased, even for the near term," he said.
The report said that for such a scenario the "possible triggers include rising trade tensions and conflicts, geopolitical concerns, and mounting political uncertainty".
Citing the tariff increases by the US and retaliation by other countries, it said they "could derail the recovery and depress medium-term growth prospects".
The Update kept the growth projections for China unchanged at 6.6 per cent for this year and 6.4 for 2019, and for the US at 2.9 per cent for 2018 and 2.7 per cent next year.
But for the Euro zone, it cut the growth projections by 0.2 per cent to 2.2 per cent for this year and by 0.1 per cent to 1.9 per cent for next year.
Obstfeld said: "The dollar has already appreciated broadly since April, and financial conditions facing emerging and frontier economies have become somewhat more restrictive."
The Update said the dollar has appreciated by 5 per cent since February.
As for reducing the projections for India, it said they reflect the "negative effects of higher oil prices on domestic demand and faster than-anticipated monetary policy tightening due to higher expected inflation."
The latest projections are still markedly higher than the growth rate of 6.7 per cent in 2017 and the report said it was because "drags from the currency exchange initiative and the introduction of the goods and services tax fade".
The IMF Update is in line with the World Bank's Global Economics Prospects projections issued last month.
However, the IMF numbers are lower than the United Nations growth estimate of 7.5 per cent for this year and 7.6 per cent for the next year made in May in the World Economic Situation and Prospects.
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Mumbai Metro lines 9 and 2B open for commuters
Mumbai (PTI): Commercial operations on the first phases of Mumbai Metro corridors 9 and 2B began on Wednesday morning, a day after Maharashtra Chief Minister Devendra Fadnavis inaugurated the mass-transit routes, officials said.
While the Metro 9 marks the first direct connectivity between a suburb in Mumbai and a part of Thane city in the metropolitan region, the Line 2B will provide the first metro connectivity on the Harbour Line in Mumbai.
The 5.6-km elevated Phase 1 stretch of Metro Line 9 comprises four stations -- Dahisar East, Pandurangwadi, Miragaon and Kashigaon. The 5.53-km Phase 1 of Metro Line 2B has five stations, including Deshbhakt N G Acharya Udyan (Diamond Garden), Chhatrapati Shivaji Maharaj Chowk, Deonar, Mankhurd and Maharashtra Nagar–Mandale.
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According to the Mumbai Metropolitan Region Development Authority (MMRDA), Line 9 is expected to cut travel time between Mira-Bhayandar in Thane district and Mumbai to around 30 minutes from the current one to two hours. Built at Rs 6,607 crore, it will eventually provide seamless connectivity to south Mumbai through interlinking with other lines.
With the addition of the two new lines, Mumbai’s operational Metro network has expanded to six corridors, including Line 1 (Ghatkopar-Andheri-Versova), Line 2A (Andheri West-Dahisar East), Line 7 (Dahisar East-Andheri East) and the underground Line 3 (Colaba-Bandra Kurla Complex-SEEPZ).
As per MMRDA, the revised timetable for Line 2A and Line 7 came into effect on Wednesday, aimed at improving frequency, predictability and overall commuter experience.
It said that with the inauguration of Line 9, Metro Line 2A will now operate as a standalone corridor between Andheri West and Dahisar East, with services from 5.50 am till around 11 pm and a peak frequency of about six minutes.
The integrated Line 7-9 corridor (Gundavali to Kashigaon), spanning 19.79 km, will operate from 5.50 am to 11 pm, with a peak frequency of under six minutes and 276 services on weekdays.
Metro Line 2B (Phase 1) services commenced at 6 am and will run till around 10.30 pm at intervals of approximately nine-and-a-half minutes, operating 209 services daily, according to officials.
MMRDA said the integration of Line 7 with Line 9 enables direct connectivity from Andheri East to Mira-Bhayandar, while Lines 2A and 7 will function as separate corridors.
A seamless interchange facility at Dahisar station will allow passengers to switch between Lines 2A and 7 without exiting the “paid” (ticketed) area.
