United Nations: India’s economy is projected to grow at the historically high level of 12.5 per cent this fiscal year, but the International Monetary Fund’s (IMF) Chief Economist Gita Gopinath cautioned that the current wave of the pandemic “is quite concerning.”
The growth projection was raised on the basis of “evidence we were getting in the last couple of months in terms of the normalisation of economic activity,” she said at the release of the World Economic Outlook (WEO) report in Washington, DC.
“These numbers precede the current wave of the virus, which is quite concerning,” she added.
With the unprecedented growth rate projection of 12.5 per cent not seen in modern times, India also regains its status as the world’s fastest growing economy, according to the WEO.
Malhar Nabar, the Division Chief in IMF’s Research Department, said, “The current forecast that we have already takes a fairly conservative view on the sequential growth for the Indian economy for this year.”
“But it’s true that with this very worrying uptick in (COVID-19) cases that poses very severe downside risks to the growth outlook for the economy,” he added.
The WEO projected India’s gross domestic product (GDP) growth to moderate to 6.9 per cent in next fiscal year, while still retaining the top growth rate spot.
Any elation over the historically high rate is, however, moderated by the fact of India’s negative growth rate of 8 per cent during 2020-21.
The growth rate projection for 2021-22 is 1 per cent higher than the 11.5 per cent projection made by the IMF in January and 5.1 per cent more than the 7.4 per cent in April last year.