Indian economy’s recovery from the COVID-19 pandemic induced hurdles has been better than projected, according to the International Monetary Fund (IMF) and the Reserve Bank of India (RBI).
India’s September quarter marked substantial recovery, higher than expected said the IMF on Thursday. An uptick in manufacturing helped narrow the GDP contraction of 7.5pc and there is hope for consumer demand to better, the world body said.
RBI said the Indian economy is showing stronger-than-expected pickup in recovery. RBI has revised real GDP growth rate to contract by 7.5pc from the October’s projected contraction of 9.5pc for 2020-21. GDP growth will fall by 7.5pc by the end of the fiscal year. The second half of 2021 is expected to report growth in GDP, said RBI Governor, Shaktikanta Das in a press briefing on Dec 4. The governor has however, cautioned against sustainability of demand. RBI has kept key lending rate unchanged at 4pc for the third consecutive review. The repo rate is at its 19-year low. The reverse-repo rate is at 3.35pc.
India’s economy was severely affected by the pandemic but is gradually recovering, said IMF spokesperson Gerry Rice on Thursday in a press briefing. He further stated that India’s fiscal, monetary and financial sector measures proved to be the support the economy needed including businesses, agriculture and vulnerable households.
Rice advised, to drive India’s growth further, authorities must prioritize quick implementation of the existing programs and to consider expanding their scope.
India’s Finance Minister, Nirmala Sitharaman said that India’s recovery is being viewed as a V-shaped recovery with several high-level indicators.