IMF projects impressive 11.5% growth rate for India in 2021, says economic activities revitalised 'quite significantly'

This makes India the only major world economy projected to register double-digit growth in 2021. As per the IMF, the next closest nations are China (8.1 percent), Spain (5.9 percent) and France (5.5 percent)

Press Trust of India January 26, 2021 20:41:34 IST
IMF projects impressive 11.5% growth rate for India in 2021, says economic activities revitalised 'quite significantly'

Representational image. AFP

Washington: The IMF on Tuesday projected an impressive 11.5 percent growth rate for India in 2021, making the country the only major economy of the world to register a 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 on Tuesday reflected a strong rebound in the economy, which is estimated to have contracted by eight percent in 2020 due to the pandemic.

In its latest update, the IMF projected a 11.5 percent growth rate for India in 2021. This makes India the only major economy of the world that is projected to register a double-digit growth in 2021, it said.

China is next with 8.1 percent growth in 2021 followed by Spain (5.9 percent) and France (5.5 percent).

Revising its figures, the IMF said that in 2020, the Indian economy is estimated to have contracted by eight percent. China is the only major country which registered a positive growth rate of 2.3 percent in 2020.

India’s economy, the IMF said, is projected to grow by 6.8 percent in 2022 and that of China by 5.6 percent. 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 percent below its pre-pandemic projected level. “Cumulatively by the end of 2022, India is still nine percent 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.

“In fact, we are seeing a very strong decline in cases, which is again a bit different from other parts of the world. So, these factors, including what we're seeing in terms of high frequency indicators, point to have somewhat faster pace of recovery. But again, there is still some distance to go,” Gopinath 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”.

India, she said, went for a very dramatic lockdown for a country of this size of population with people clustered so closely together. And then India moved to more targeted restrictions and lockdowns.

“What we see is that transition, combined with policy support, seems to have worked well. Why? Because if you look at mobility indicators, we are almost where we were before COVID in India, meaning that economic activities have been revitalised quite significantly,” the IMF chief 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.

“Emerging markets on average have provided six per ent of GDP. In India this is slightly above that. Good for India is that there is still space to do more,” she said, adding that she is impressed by the appetite for structural reforms that India is retaining.

Updated Date:

Subscribe to Moneycontrol Pro at ₹499 for the first year. Use code PRO499. Limited period offer. *T&C apply

also read

Market roundup: Sensex falls to 49,099.99, Nifty settles at 14,529.15 amid sell-off before release of Dec GDP data
Business

Market roundup: Sensex falls to 49,099.99, Nifty settles at 14,529.15 amid sell-off before release of Dec GDP data

All the shares in the BSE Sensex closed in red on Friday with ONGC being the top loser, shedding 6.6 percent, followed by Mahindra & Mahindra, Bajaj Finserv, and Axis Bank

GDP to be in growth territory in Oct-Dec, signifies exit from COVID-induced recession, says ICRA report
Business

GDP to be in growth territory in Oct-Dec, signifies exit from COVID-induced recession, says ICRA report

Private consumption and government spending will help the economy post a turnaround during the December quarter and the GDP will grow 0.7 percent, the ratings agency said

Cash-strapped Pakistan offers $50 mn new credit line to Sri Lanka to boost defence cooperation
World

Cash-strapped Pakistan offers $50 mn new credit line to Sri Lanka to boost defence cooperation

PM Imran Khan announced the new credit line during his two-day visit to Sri Lanka even as his govt is arranging finances from world bodies to tide over the coronavirus crisis