Covid-19: With successful vax drive, India to retain 9.5% growth in FY22, says IMF
Virendra Pandit
New Delhi: With a successful ongoing vaccination drive against Covid-19, administering close to 100 crore jabs, the rebounding Indian economy is expected to keep a projected 9.5 percent growth rate in 2021-22, the International Monetary Fund (IMF) said late on Tuesday.
India is doing well to vaccinate its population which is certainly helpful in improving its economy, Gita Gopinath, Chief Economist at the IMF, said as the global financial institution, in its latest outlook, projected a 9.5 percent growth rate for the country in the current financial year.
“We don’t have a change to our growth forecast for this year for India. I mean, India came out of a very tough second wave of the pandemic, which led to a big downgrade in July. But we have no change (in its growth rate projections) as of now,” she told reporters during a virtual conference call.
India’s growth projection released by the latest World Economic Outlook (WEO) remains unchanged from its previous update of July this summer but is a three-percentage point in 2021 and a 1.6 percentage point drop from its April projections.
According to the latest WEO update, released ahead of the annual meeting of the IMF and the World Bank, the Indian economy, which contracted by 7.3 percent last financial year because of the pandemic, is expected to grow by 9.5 percent in 2021 and 8.5 percent in 2022.
Overall, the world economy is likely to grow at 5.9 percent in 2021 and 4.9 percent in 2022. They project the United States to grow at six percent this year and 5.2 percent the next year. China, the IMF said, is projected to grow at 8 percent in 2021 and 5.6 percent in 2022.
Gopinath said the Indian economy is facing many challenges regarding the financial market and the fact that the coronavirus is not gone yet.
“The Indians are doing well in terms of vaccination rates and that’s certainly helpful,” she said while answering a question.
Malhar Nabar, who heads the World Economic Studies Division in the IMF’s Research Department that produces the World Economic Outlook (WEO), said there is still room to provide more support if needed if the pandemic takes a turn for the worse, to provide it in a targeted manner to the worst-affected households and firms.
“But from now on over the medium term, it was important to put in place a credible medium-term strategy to bring down the debt-to-GDP ratio, and create space to meet the future development needs and infrastructure needs of the Indian economy,” he added.
