Indian economy in 2021
According to the International Monetary Fund (IMF), the Indian Economy is estimated to post a narrower contraction of 8 per cent in the current financial year. Moreover, it projected an impressive 11.5 per cent growth rate for Indian economy in 2021, making the country the only major economy of the world to register a double-digit growth this year amid the coronavirus pandemic.
Indian economy in 2021, amid the novel coronavirus pandemic
According to the World Economic Situation and Prospects 2021, produced by the United Nations Department of Economic and Social Affairs (UN DESA), the world economy was globally hit by a once-in-a-century crisis – a great disruption unleashed by the COVID-19 pandemic in 2020.
The global economy dropped off by 4.3 per cent last year, accounting to over two-and-a-half times more than during the global financial crisis of 2009. The modest recovery of 4.7 per cent expected in 2021 would barely offset the losses of 2020.
The IMF released its latest World Economic Outlook Update on Tuesday projecting India’s growth rates. The projections reflected a strong rebound in the economy, which is estimated to have contracted by 8 per cent in 2020 due to the pandemic.
In its latest update, the IMF projected a 11.5 per cent growth rate for India in 2021, proclaiming India as the only major economy of the world to register a double-digit growth in 2021.
India is followed by China, with 8.1 per cent growth in 2021, which is further followed by Spain (5.9 per cent) and France (5.5 per cent).
While revising their figures, the IMF estimated India’s economic contraction by 8 per cent in 2020, with China being the only major country which registered a positive growth rate of 2.3 per cent in 2020.
India becomes the fastest developing economies of the world
According to the IMF, India’s economy, is projected to grow by 6.8 per cent in 2022 and that of China by 5.6 per cent.
With the latest projections, India regains the title of the fastest developing economies of the world.
Early this month, IMF Managing Director Kristalina Georgieva had said that India “actually has taken very decisive action, very decisive steps to deal with the pandemic and to deal with the economic consequences of it”.
“India went for a very dramatic lockdown for a country of this size of population with people clustered so closely together. And then India moved to more targeted restrictions and lockdowns,” said Georgieva.
“What we see is that transition, combined with policy support, seems to have worked well. Why? Because if you look at mobility indicators, we are almost where we were before COVID in India, meaning that economic activities have been revitalized quite significantly,” the IMF chief said.
Commending the steps being taken by the Indian government on the monetary policy and the fiscal policy side, she said it is actually slightly above the average for emerging markets.
Adding the fact that she is impressed by the appetite for structural reforms that is retained by India, the IMF chief added, “Emerging markets on average have provided six per cent of GDP. In India this is slightly above that. Good for India is that there is still space to do more.”