IMF projects India to have the strongest growth of over 11% in 2021

Last updated on February 6th, 2021 at 09:00 am

International Monetary Fund (IMF) has projected on Tuesday that India’s growth rate in 2021 would be 11.5%. This would make India the only prominent world economy to record double-digit growth in 2021. 

The projection was made by IMF in its latest World Economic Outlook Update that was released on Tuesday, reflecting a strong bounce back by Indian economy. In 2020, India recorded an estimate of 8% contraction due to coronavirus pandemic. The latest update shows India to record 11.5% growth in 2021. China follows next with estimate of 8.1% and Spain with 5.9% in 2021. 

IMF said that in 2020 China was the only country to have registered a positive growth of 2.3%. It further added that in 2022 India’s economy will continue to grow by 6.8% and of China by 5.6%. The latest projections will make India the fastest growing economy of the world. 

IMF Managing Director Kristalina Georgieva said earlier this month 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.” She added that India embarked on a dramatic lockdown for a country with huge size, and then moved on to more targeted lockdown. 

She said, “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.” 

American economist with IMF, Gita Gopinath said, “Greater success with vaccinations and therapeutics and additional policy support could improve outcomes, while slow vaccine rollout, virus mutations, and premature withdrawal of policy support can worsen outcomes.” She added, “If downside risks were to materialize, a tightening of financial conditions could amplify the downturn at a time when public and corporate debt are at record highs worldwide.”