The International Monetary Fund (IMF) on Monday revised its forecast for world economic growth in 2018 and 2019, upwards to 3.9 percent.
The World Economic Outlook projects India's growth at 7.4 percent for 2018 and 7.8 percent for 2019, ahead of the World Economic Forum in Davos.
"Emerging and developing Asia will grow at around 6.5 percent over 2018-19, broadly the same pace as in 2017. The region continues to account for over half of world growth. Growth is expected to moderate gradually in China, though with a slight upward revision to the forecast for 2018 and 2019 relative to the fall forecasts, reflecting stronger external demand, pick up in India, and remain broadly stable in the ASEAN-5 region," IMF said in a notification.
Further, the global economic activity continues to firm up.
Global output is estimated to have grown by 3.7 percent in 2017, which is 0.1 percentage point faster than projected in the fall and 0.5 percentage point higher than in 2016.
The pickup in growth has been broad based, with notable upside surprises in Europe and Asia.
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Global growth forecasts for 2018 and 2019 have been revised upward by 0.2 percentage point to 3.9 percent.
The revision reflects increased global growth momentum and the expected impact of the recently approved U.S. tax policy changes, according to IMF.
The U.S. tax policy changes are expected to stimulate activity, with the short-term impact in the United States mostly driven by the investment response to the corporate income tax cuts.
The effect on U.S. growth is estimated to be positive through 2020, cumulating to 1.2 percent through that year, with a range of uncertainty around this central scenario.
Due to the temporary nature of some of its provisions, the tax policy package is projected to lower growth for a few years from 2022 onwards.
The effects of the package on output in the United States and its trading partners contribute about half of the cumulative revision to global growth over 2018-19.
Risks to the global growth forecast appear broadly balanced in the near term, but remain skewed to the downside over the medium term.
"If global sentiment remains strong and inflation muted, then financial conditions could remain loose into the medium term, leading to a buildup of financial vulnerabilities in advanced and emerging market economies alike. Inward-looking policies, geopolitical tensions, and political uncertainty in some countries also pose downside risks," the notification added.
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