According to the International Monetary Fund (IMF), India’s economy is on the steady way to recovery after facing Covid as the bump in the road of progress.
The International Monetary Fund (IMF) gave a statement on Thursday which said India’s Economy is gradually recovering after its devastating encounter with two covid waves back-to-back.
It also warned the authorities against the severe inflammation. The firm suggested gradual relaxation in monetary policy support as retrieval attains base.
Indian Economy recovered sooner than anticipated in the September quarter as a lift in the manufacturing sector supported GDP record a lower shrink of 7.5 per cent hence offering confidence for further enhancement on better consumer demand.
IMF chief spokesperson Gerry Rice talked to the reporters on Thursday, addressing the severe impacts of the pandemic Corona Virus on India and its steady recovery.
He also added that to provide additional support to the growth, the Indian authorities should emphasize the instant implementation of the existing support programs and consider expanding their scope as warranted.
While addressing IMF’s evaluation of the Indian Economy during the coronavirus pandemic, Rice mentioned that the revenue, financial and monetary sector initiative circulated to date offered essential support to the Economy, including various sectors as businesses, agriculture, and necessary households.
Impact of COVID-19 on Indian Economy
International Monetary Fund reported that Covid-19 has highly impacted the investment and human capital, and the chances are that it would extend the process of recovery and influence medium-term growth.
However, the recovery can be quicker and smoother than anticipated because of the rate of vaccination and economic refinement.
In the annual report on India, the IMF’s executive board said the economic point of view is still obscure because of the pandemic involved hesitancies handing out both advantages and disadvantages.
The second wave prompted another stark downsize inactivity, though smaller and slower, recently high-frequency indicators intimate an in-progress recovery of the Economy.
The probability of prolonged recovery and hindrance in medium-term growth is still out there if the negative impact of Covid continues on the investment and other growth drivers.
Measures were taken by the government, such as providing vaccination for faster recovery and better medicinal support, which can boost the recovery process and limit the impact of COVID.
India enjoys favorable demographics, but the interruption in access to education and training due to the coronavirus pandemic can cause harm to the developments in human capital.
Union Finance Minister of India, Nirmala Sitharaman, addressed the ministerial-level committee of the IMF through video conference and talked about the V-shaped pattern of recovery in several high-level indicators.
Even IMF agreed to the notion that high-frequency indicators, including PMIs trade and mobility, recommend a sustained recovery in the first quarter of 2021.
However, the latest surfacing of the new Covid variants and several localized lockdowns can cause risk to the recovery.
The board released its report on Friday in which it stated that the successful execution of the declared all-inclusive structural mends could expand the country’s growth potential. It also said that conserving an agreeable financial policy would be suitable.
Projection of India’s economic growth
The IMF estimated the country’s economic rise at 9.5 per cent for the ongoing financial year, and the headline consumer price inflation is expected to be at 5.6 per cent amidst the hiked price pressures.
According to the reports, inflationary pressures have been hiked, yet the price rate managed to soothe down to 5.6 per cent in July, which falls under the target of the Reserve Bank of India, fueled by lower food prices and base effects.
The headline inflation rate has come down to 5.3 per cent in August and 4.3 per cent in September as per the official data given by the authorities.
The IMF is all set to release its World Economic Outlook on April 6.
