The IMF’s growth projections for India in its latest update of the World Economic Outlook released on Tuesday reflected a strong rebound in the economy, which is estimated to have contracted 8% in 2020 due to the pandemic.
In its latest update, the IMF projected a growth rate of 11.5 percent for India in 2021. This makes India the only major economy in the world to record double-digit growth in 2021, he said.
China follows with a growth of 8.1% in 2021, followed by Spain (5.9%) and France (5.5%).
In reviewing its figures, the IMF said that in 2020, the Indian economy is estimated to have contracted 8 percent. China is the only major country that posted a positive growth rate of 2.3% in 2020.
India’s economy is projected to grow by 6.8 percent in 2022, the IMF said, and China’s by 5.6 percent.
With the latest projections, India regains the label of the world’s fastest developing economies.
Earlier this month, IMF Managing Director Kristalina Georgieva had said that India “has actually taken very decisive measures, very decisive measures to deal with the pandemic and deal with its economic consequences.”
India, he said, opted for a very dramatic lockdown for a country of this population size with people clustered so close together. And then India moved to more specific restrictions and closures.
“What we see is that the transition, combined with the policy support, seems to have worked well. Why? Because if you look at the mobility indicators, we are almost where we were before Covid in India, which means that economic activities have been revitalized quite significantly, ”said the head of the IMF.
Praising the steps the Indian government is taking on the monetary and fiscal policy side, he said that it is actually slightly above the emerging market average.
Emerging markets have on average provided six percent of GDP. In India, this is slightly above that. The good thing for India is that there is still room to do more, ”she said, adding that she is impressed by India’s appetite for structural reforms.
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