India’s strong economic fundamentals and policy response have helped it withstand global energy and financial shocks with the International Monetary Fund (IMF) affirming that the country remains among the world’s fastest-growing major economies.
Speaking at a press briefing in Bangkok, Krishna Srinivasan, Director of the IMF’s Asia and Pacific Department said that India entered the recent energy shock with robust growth and fiscal discipline already in place and had responded effectively to external challenges.
Moreover, the IMF has raised its growth outlook for India after stronger-than-expected economic performance in the April-June quarter.
It now pegged India’s economy to grow by 7 per cent this year and next year while maintaining a medium-term growth trajectory of around 6.9 per cent.
However, official data showed real GDP growth of 7.8 per cent in the April-June quarter.
According to the IMF’s latest World Economic Outlook, India continues to stand out among major economies, supported by resilient domestic demand, strong services activity, favourable demographics, a large and expanding domestic market and ongoing structural reforms.
Srinivasan also said recent pressure on the rupee should not be interpreted as a sign of economic weakness, noting that exchange rates are influenced by global interest rates, investor sentiment and oil prices.
As a major oil importer, India has been affected by the global energy shock but currency movements do not determine the success or failure of an economy, according to him.
The IMF also endorsed India’s revised GDP methodology with Srinivasan describing the changes as consistent with international best practices and previous IMF recommendations.
He said the efforts of the Ministry of Statistics and Programme Implementation (MoSPI) in improving national accounts statistics deserved recognition.
Highlighting the regional outlook, Srinivasan said India had surprised on the upside, even as growth prospects for several economies in Asia have moderated amid global uncertainties.
