The International Monetary Fund (IMF) on Tuesday projected an 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.
China is next with 8.1 per cent growth in 2021 followed by Spain (5.9 per cent) and France (5.5 per cent). Revising its figures, the IMF said that in 2020, the Indian economy is estimated to have contracted by eight per cent. China is the only major country which registered a positive growth rate of 2.3 per cent in 2020.
India’s economy, the IMF said, is projected to grow by 6.8 per cent in 2022 and that of China by 5.6 per cent. With the latest projections, India regains the tag of the fastest developing economies of the world.
“The global growth contraction for 2020 is estimated at -3.5 percent, 0.9 percentage point higher than projected in the previous forecast reflecting stronger-than-expected momentum in the second half of 2020,” the IMF’s report said.
“What has kind of worked well for India is that when the economy opened up after the stringent lockdowns, you saw activity recovering much faster than expected. Mobility has returned much more quickly. While in other economies when you reopened, you then had a second and third strong wave of the pandemic, that has not happened in India,” said the Chief Economist at IMF.
The fund expects policymakers to continue printing money to cement recovery. “Major central banks are assumed to maintain their current policy rate settings throughout the forecast horizon to the end of 2022. As a result, financial conditions are expected to remain broadly at current levels for advanced economies while gradually improving for emerging markets and developing economies,” it said
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”.
