The International Monetary Fund (IMF) on Tuesday revised its India’s growth rate projection for 2021 to a decent 11.5% from 8.8% it had projected earlier on the back of the country’s “stronger than expected recovery”. It also improved its forecast for India’s current fiscal to 8% GDP contraction from 10.3% negative growth projected in its October World Economic Outlook report.
According to the IMF, India is the only major economy in the world that can register a double-digit growth in 2021. China is next with 8.1% growth in 2021 followed by Spain (5.9%) and France (5.5%).
The latest projections give India the tag of the fastest developing economy in the world.
The projections are also in line with the Centre’s assessment of a strong revival in the coming months, aided by the recent vaccine approvals. After a stupendous rebound in 2021, the IMF said India’s GDP growth is likely to slow in 2022 to 6.8%.
IMF Chief Economist Gita Gopinath said India seems to be having a faster pace of recovery than previously thought. “We are seeing India come back to its 2019 levels and 2021,” Gopinath said. She, however, noted that cumulatively by the end of 2022, India’s rate will be 9% below its pre-pandemic projected level.
The IMF said the global economy is projected to grow 5.5% in 2021 and 4.2% in 2022. “The 2021 forecast is revised up 0.3 percentage point relative to the previous forecast, reflecting expectations of a vaccine-powered strengthening of activity later in the year and additional policy support in a few large economies,” it added.
The IMF, however, warned that delays in vaccine rollout, widespread hesitancy in inoculation, shorter-than anticipated immunity from the vaccines could be a downside risk to recovery. It adds that winding down of policy support before economic recovery could further hurt global growth.
5.5% growth for global economy
Global economy is projected to grow at 5.5% in 2021 and 4.2% in 2022, reflecting expectations of a vaccine-powered strengthening of business activities, the IMF said