International Monetary Fund lowers 2015 global growth forecast to 3.3pc

In case of both India and China, International Monetary Fund 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.

Chinese stock markets have tumbled by more than 30pc in the past month, prompting regulators to impose heavy-handed intervention to stem the rout.

But in advanced economies, it said, the growth was projected to increase from 1.8 percent in 2014 to 2.1 percent in 2015 and 2.4 percent in 2016 – which was a more gradual pickup than what was forecast in the April scenario.

Asian shares are mostly higher and the euro gained ground as Greece inched closer to a deal with its creditors.

A Fund spokesperson said that Lagarde spoke during the day with Prime Minister Alexis Tsipras, offering technical assistance to the government but reminding him that the IMF can not disburse any financing to Athens because the country had defaulted on an IMF debt payment last week. While the growth outlook on India for 2016 has been retained at 7.5 percent, that for China is pegged 50 basis points lower at 6.3 percent. This is lower and slower than last year’s 3.4 percent expansion.

The underlying drivers for acceleration in consumption and investment in the United States – wage growth, labor market conditions, easy financial conditions, lower fuel prices, and a strengthening housing market – remain intact. The European Central Bank has also proved to markets it’s ready to use its substantial monetary arsenal to douse financial fires.

Together with aging workforces and deteriorating productivity levels around the world, the global economy faces a bleak, low-growth outlook through the rest of the decade. “In a number of countries with fiscal space, the near-term fiscal stance should be eased, especially through increased infrastructure investment”.

The strong dollar, in turn, has caused trouble for many emerging-market economies and companies that borrowed heavily in greenback-debt.

Meanwhile, Tata Consultancy Services, India’s largest software services exporter, reported a better-than-expected quarterly net profit, while revenue fell short of expectations due to difficulties from the Japanese and Latin American markets. “Raising actual and potential output, through a combination of demand support and structural reforms, continues to be the economic policy priority”.