The IMF projected an impressive 11.5 per cent growth rate for India in 2021, making the country the only major economy of the world to register double-digit growth this year amidst the coronavirus pandemic. The International Monetary Fund’s growth projections for India in its latest World Economic Outlook Update released reflected a strong rebound in the economy, which is estimated to have contracted by eight per cent in 2020 due to the pandemic.
With this, India will emerge as the only key nation to record double-digit growth and reclaim the status of the world’s fastest-growing major economy, it added. India’s real gross domestic product (GDP) shrank as much as 8 per cent in FY21 due to the Covid-19 pandemic, the multilateral body said. In FY23, the economy will likely grow 6.8 per cent, it added. China is next with 8.1 per cent growth in 2021 followed by Spain (5.9 per cent) and France (5.5 per cent).
Early this month, IMF Managing Director Kristalina Georgieva had said that India actually has taken very decisive action, very decisive steps to deal with the pandemic and to deal with the economic consequences of it. India, she said, went for a very dramatic lockdown for a country of this size of the population with people clustered so closely together. And then India moved to more targeted restrictions and lockdowns.
With the latest projections, India regains the tag of the fastest developing economies of the world. IMF Chief Economist Gita Gopinath, during a virtual press conference to release the WEO update, said that India has somewhat a faster pace of recovery, but cumulatively by the end of 2022, it is nine per cent below its pre-pandemic projected level. “Cumulatively by the end of 2022, India is still nine per cent below its pre-pandemic projected level,” Gopinath said. “We are seeing India come back to its 2019 levels and 2021, but it’s still below. Why do we have these upgrades (in IMF’s growth projections for India)….because the activity and mobility particularly came back much faster than expected in India. We have not seen another wave,” Gopinath said.
Commending the steps being taken by the Indian government on the monetary policy and the fiscal policy side, she said it is actually slightly above the average for emerging markets.
