International Monetary Fund (IMF) has projected a 9.5 percent growth rate for India in 2021 citing the way India has tackled the second wave of coronavirus pandemic. While the world looks on, India has already vaccinated a major chunk of its vast population hence increasing the chances of economic growth in the next financial year.
Gita Gopinath, Chief Economist of the IMF, said India is recovering from the Covid-19 pandemic but its growth rate projections are not to be changed by the global financial institution.
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"We don't have a change to our growth forecast for this year for India. I mean India came out of a very, very tough second wave and that led to a big downgrade in July but we have no change (in its growth rate projections) as of now," Gita Gopinath told reporters during a virtual conference call on Tuesday.
Ms Gopinath said there are many challenges that the Indian economy faces with regard to the financial market as the threat of coronavirus has not been phased out completely.
"The Indians are doing well in terms of vaccination rates and that's certainly helpful," Ms Gopinath said.
India's growth projection released by the latest World Economic Outlook remains unchanged from its previous WEO update of July this summer but is a three-percentage point in 2021 and a 1.6 percentage point drop from its April projections.
According to the latest WEO update, released ahead of the annual meeting of the IMF and the World Bank, India's economy which contracted by 7.3 percent a year due to the COVID-19 pandemic is expected to grow by 9.5 percent in 2021 and 8.5 percent in 2022.
The world is expected to grow at 5.9 percent in 2021 and 4.9 percent in 2022. The United States is projected to grow at six percent this year and 5.2 percent the next year. China, on the other hand, the IMF said, is projected to grow at 8 percent in 2021 and 5.6 percent in 2022.
(With PTI Inputs)