Emerging from the COVID-19 disruptions, India's economic growth is projected to reach the historically high level of 12.5 per cent this fiscal year and also regain its status as the world's fastest-growing economy, the International Monetary Fund (IMF) reported on Tuesday
Emerging from the COVID-19 disruptions, India's economic growth is projected to reach the historically high level of 12.5 per cent this fiscal year and also regain its status as the world's fastest-growing economy, the International Monetary Fund (IMF) reported on Tuesday.
Its gross domestic product (GDP) growth is projected to moderate to 6.9 per cent next fiscal year, while still retaining the top growth rate spot, according to the World Economic Outlook (WEO) released by the IMF in Washington.
The high growth rate not seen in modern times is, however, moderated by the fact of India's negative growth rate of 8 per cent during 2020-21.
It was made before the latest new wave of rising COVID-19 cases in India and is predicated on there being no lockdowns or serious disruptions.
The 12.5 per cent growth rate for 2021-22 is 1 per cent higher than the 11.5 per cent projection made by the IMF in January and 5.1 per cent more than the 7.4 per cent in April last year.
The previous highest GDP growth rate in modern times for India was recorded in 2010 at 10.3 per cent, and the records before that were 9.8 per cent set in 2007 and 9.6 in 1988, according to IMF data.
The IMF growth rate projection for India is nearly in line with the 12.6 per cent from the Organization for Economic Cooperation and Development (OECD) with 37 member nations, although it was a tad lower.
IMF's Chief Economist Gita Gopinath struck a note of optimism for the world economy, which was projected by the IMF to grow by 6 per cent this year, an increase of 0.5 per cent from the January figure.
She wrote in a foreword to the WEO, “Even with high uncertainty about the path of the pandemic, a way out of this health and economic crisis is increasingly visible.”
“Adaptation to pandemic life has enabled the global economy to do well despite subdued overall mobility, leading to a stronger-than-anticipated rebound, on average, across regions,” she added.
However, she also warned, “A high degree of uncertainty surrounds these projections, with many possible downside and upside risks. Much still depends on the race between the virus and vaccines. Greater progress with vaccinations can uplift the forecast, while new virus variants that evade vaccines can lead to a sharp downgrade.”
India's projected growth rate is 4.1 per cent higher than that for China, which ranks next with 8.4 per cent.
But China was the only major economy to have a positive growth last year of 2.3 per cent, while the rest of the world was in the red. The global economy shrank by 3.3 per cent last year.