India will be the world's fastest growing major economy for the second consecutive year in 2016 at 7.5 per cent, the International Monetary Fund (IMF) said on Thursday, even as it lowered its global economy growth forecast for the current year to 3.3 per cent.
In its World Economic Outlook Update released here, IMF retained India's growth projection for current year at 7.5 per cent which will be higher than China's 6.8 per cent. It forecast a growth rate of 7.5 per cent for India in 2016 as well, as against China's 6.3 per cent.
China was the fastest growing economy in 2014 at 7.4 per cent as against India's 7.3 per cent, IMF data showed.
IMF's growth projection for India, however, is lower than the estimates of the Finance Ministry and the Reserve Bank of India. The Finance Ministry expects GDP growth to be 8-8.5 per cent in 2015-16, while the Reserve Bank of India has estimated it at 7.6 per cent.
For India, IMF follows data for fiscal year ending March whereas for other countries, it considers the December-ending periods.
In case of both India and China, IMF has retained the projection made earlier in April, while it has lowered global growth forecast from 3.5 per cent to 3.3 per cent for 2015.
The global growth projection for 2016 has been retained at 3.8 per cent.
"Global growth is projected at 3.3 per cent in 2015, marginally lower than in 2014, with a gradual pickup in advanced economies and a slowdown in emerging market and developing economies. In 2016, growth is expected to strengthen to 3.8 per cent," the report said.
In emerging market economies, it said, the continued growth slowdown reflects several factors, including lower commodity prices and tighter external financial conditions, structural bottlenecks, rebalancing in China and economic distress related to geopolitical factors.
A rebound in activity in a number of distressed economies is expected to result in a pickup in growth in 2016.
Growth in emerging market and developing economies has been estimated at 4.2 per cent in 2015, down 0.1 per cent from the projection made April.