Successful macroeconomic management of pandemic results in strong recovery of India’s economy: IMF’s Mission Chief
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The International Monetary Fund’s (IMF’s) Mission Chief for India Nada Choueiri has said that the successful macroeconomic management of the Covid-19 pandemic has resulted in a strong recovery of India’s economy because of which the country is in a better position to face the economic fallout of the current Ukrainian crisis. Observing that India represents about seven per cent of the total world economy in purchasing power parity (PPP) terms and is one of the countries that are growing rapidly, she said India’s growth is lifting the global economy and is very important for a well-functioning global economy. She added the other important role that India is playing today is in the provision of vaccines. As a significant vaccine producer, India has a role also in managing future pandemics.
Giving her impression about the performance of the Indian economy during this global economic crisis beginning with the Covid-19 pandemic, she said India took important measures on a spectrum of policies. She said ‘we saw sound fiscal management to get things right, to create fiscal space, to respond to the immediate needs of the population. We also saw proactive monetary policy to respond to the needs of the financial system and of the corporate sector to support the liquidity needs during the pandemic’.
In its latest World Economic Outlook, the IMF downgraded its projections from its previous of nine per cent growth for the year 2022 to 8.2 per cent (a drop of 0.8 percentage points) this year. Choueiri explained that this was largely due to the war in Ukraine. Observing that in terms of the Ukraine war a whole slew sets of challenges are coming on top of the pandemic crisis, Choueiri asserted that a number of strengths will help India whether this shock.
Though, she also said India is on a recovery path from the economic fallout of the pandemic. There was a very sharp recession in fiscal year 2021, where GDP declined by 6.6 per cent. And there was a strong recovery from that last year. The estimate for growth for last year is 8.9 per cent. She said ‘This is a strong rebound. And this is despite a very severe second wave, which happened in the first quarter of the financial year that just ended. So, despite that we see a strong recovery having taken place last year and the recovery is still continuing’.
