International Monetary Fund (IMF) on Friday reiterated that India is a bright spot in the world economy.
Addressing a conference and book launch titled ‘South Asia’s Path to Resilient Growth’, IMF’s Deputy Managing Director Antoinette Sayeh said that having broadly recovered from pandemic, “India is a relative bright spot in the world economy today, growing at rates significantly above its peer average.”
IMF has projected India’s growth at 6.8 per cent. Many other agencies have projected growth between 6.5 to 7 per cent for the current fiscal 2022-23 though a couple of agencies estimated growth to be below 6 per cent
Further, she acknowledged that macroeconomic policies are responding to the significant headwinds, with fiscal policy measures supporting vulnerable groups and monetary policy addressing persistently high inflation
“A world class digital public infrastructure is facilitating innovation, productivity improvements, and access to public and financial services. India is making important progress on its structural reform agenda, and further implementation of the reforms would help unlock its growth potential,” she said.
Highlighting the overall situation in South Asia, she said over the past two decades, extreme poverty has declined from 500 million to fewer than 250 million people in Bangladesh, Bhutan, India, the Maldives, Nepal, and Sri Lanka— a remarkable success story for the region and the world. Per capita income during this period has doubled, helping to deliver improved health care, education, and infrastructure, as well as better access to financial services, the Internet, and mobile technology to millions of South Asians.
Now, “poverty reduction cannot be taken for granted and is instead the result of policy choices,” she said. And identifying the right policies matters not just for the pace of growth but also for ensuring that growth is sustainable, inclusive and benefits all.
The key overarching question is, how can South Asia return to the growth rates of the past two decades, achieve resilient and climate-friendly growth without a renewed buildup of macroeconomic vulnerabilities, and resume the momentum of poverty reduction, she asked.
“By drawing lessons from South Asia’s own history as well as from cross-country comparisons with peers, our book shows that the right policy design is crucial for the region’s rapid growth trajectory. This becomes even more important as the effects of climate change are increasingly visible in South Asia. If left unaddressed, they could erase much of the progress on growth and poverty reduction,” she said.