Amid talks of slowdown and recession, the International Monetary Fund (IMF) has praised India once again for its economic growth and structural reforms carried out in the last few years. IMF Managing Director Kristalina Georgieva today said that India deserves to be called a bright spot on this otherwise dark horizon because it has been a fast-growing economy, even during these difficult times, but most importantly, this growth is underpinned by structural reforms. She called India’s digitalisation a remarkable success. “This has been indeed a huge factor in India’s success,” she said.
In its World Economic Outlook, the IMF projected 6.8 per cent growth for India in 2022 and 6.1 per cent in 2023, the highest for any large economy. This makes India the fastest-growing economy in the world, this assumes significance as some countries in Europe like Germany and Italy are staring at recession next year.
The UK is projected to grow at just 0.3 per cent next year, while France will grow at 0.7 per cent and the US at 1 per cent. China’s economic growth too has slowed down, and it is projected to grow at 3.2 per cent in 2022 and 4.4 per cent in 2023.
Global growth is forecast to slow from 6 per cent in 2021 to 3.2 per cent in 2022 and 2.7 per cent in 2023. This is the weakest growth profile since 2001 except for the global financial crisis and the acute phase of the pandemic. The IMF expects significant slowdowns for the largest economies like the US and China.
The World Bank last month said that as central banks across the world simultaneously hike interest rates in response to inflation, the world may be edging toward a global recession in 2023 and a string of financial crises in emerging markets and developing economies.
However, amid all these predictions, India has got thumbs up from some of the top financial institutions and policy experts who say the country’s fundamentals are strong and that it may not be impacted by the possible recessions in the European countries.
Today, IMF’s chief economist Pierre-Olivier Gourinchas said that India has emerged as ‘a bright light’ at a time when the world is facing imminent prospects of a recession. “Well, India is, I want to say, sort of bright light. The Indian economy has been doing reasonably well,” he said. Gourinchas also hailed the country for its digital innovation and said the country is very much at the forefront of digitalisation.
“The way these digital tools can be deployed to improve financial inclusion or to facilitate access to administrative services, and things like that. And that is a testimony to the sort of innovation in that sector that is happening in India,” he said.
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