The International Monetary Fund in its World Economic Outlook update for July projected a growth rate of 7.3% in 2018 and 7.5% in 2019 for India as against 6.7% in 2017, making it the fastest growing country among major economies.

India’s growth rate is expected to rise as “drags from the currency exchange initiative and the introduction of the Goods and Services Tax fade”, according to the report.

The latest growth rate projection for India, however, is 0.1% less in 2018 and 0.3% in 2019 compared to the April projections. This reflects the “negative effects of higher oil prices on domestic demand and faster-than-anticipated monetary policy tightening due to higher expected inflation”, according to the IMF.

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Despite the slight downgrade in projections, India continues to outperform China. Growth in China is projected to moderate from 6.9% in 2017 to 6.6% in 2018 and 6.4% in 2019. This is because of “regulatory tightening of the financial sector” and as “external demands softens”, the report said.

Among emerging market and developing economies, the IMF report said growth prospects are becoming more uneven, amid rising oil prices, higher yields in the United States, escalating trade tensions, and market pressures on the currencies of some economies with weaker fundamentals.

The IMF said global growth is projected to reach 3.9% in 2018 and 2019, in line with the World Economic Outlook update release in April, but the expansion is becoming less even.

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The rate of expansion appears to have peaked in some major economies and growth has become less synchronised. In the United States, near-term momentum is strengthening in line with the April World Economic Outlook forecast, and the US dollar has appreciated by around 5% in recent weeks, it said.

Growth projections have been revised down for the Eurozone, Japan, and the United Kingdom, Argentina and Brazil, while the outlook for some oil exporters has strengthened.