Evidence of normalization of India’s economic activity: IMF chief economist

Washington: There is evidence of normalization of economic activities in India, IMF Chief Economist Gita Gopinath has said ahead of the annual spring meeting of the International Monetary Fund and the World Bank here.

On Tuesday, the IMF projected an impressive 12.5 per cent growth rate for India in 2021, stronger than that of China, the only major economy to have a positive growth rate last year during the COVID-19 pandemic.

“The evidence we were getting in the last couple of months in terms of the normalization of economic activity,” Gopinath said ahead of the annual spring meeting of the IMF and the World Bank here.

In its annual World Economic Outlook, the Washington-based global financial institution said that the Indian economy is expected to grow by 6.9 per cent in 2022.

In 2020, India’s economy contracted by a record eight per cent.

However, compared to the previous projections, the change in 2021 forecast is pretty small, Gopinath noted.

“In the case of India, we have a pretty small change. It’s 1 percentage increase for growth for 2021. This came in with high frequency,” she said in response to a question.

Malhar Nabar, Division Chief of the research department at the IMF, told reporters that the current forecast that the IMF has for India 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 cases that poses very severe downside risks to the growth outlook for the economy,” Nabar said.

The global economy shrank by 4.3 per cent last year, over two-and-a-half times more than during the global financial crisis of 2009.

According to Johns Hopkins University’s coronavirus tracker, the COVID-19 has so far infected 131,707,267 people and killed 2,859,868 people across the world since it first broke out in central China”s Wuhan city in 2019.