In its World Economic Outlook update in the month of July, the International Monetary Fund (IMF) has projected a 7.3 percent growth for 2018 and 7.5 percent growth for 2019 for India from 6.7 percent in 2017. Although it is still projected to be one of the fastest growing economies in the world, the growth projection was reduced by 0.1 percent for 2018 and 0.3 percent for 2019 compared to the April 2018 estimates.

IMF has warned of a damage to the growth in world economy due to escalating trade conflicts between countries after the US imposed tariffs on its trade partners and also will also pressurize the medium-term growth prospects. It said that the potential damage from the tariff threats could be a 0.5 percent reduction in annual global economic output by 2020, which could be a nearly $500 billion loss in output as per a Reuters report.

"The risk that current trade tensions escalate further with adverse effects on confidence, asset prices, and investment is the greatest near-term risk to global growth," the IMF chief economist Obstfeld said in a news conference.

IMF's projection of growth in China and the US remained unchanged. Growth in China is projected to be at a moderate level of 6.6 percent in 2018 and 6.4 percent in 2019, which is lower than 6.9 percent in 2017. The projected growth is also lower than that of India. A 2.9 percent growth in 2018 and 2.7 percent in 2019 was estimated for the US.

Growth projections were cut for the eurozone, Britain, Japan, and Brazil due to political uncertainties in these countries and a lower than expected first quarter performance.

India's growth rate was cut citing the negative effects of rising oil prices from domestic demand and "faster than anticipated monetary policy tightening due to higher inflation".