The United Nations: International Monetary Fund (IMF) has praised the “fast and substantial” response of India’s authority against Covid-19 pandemic and notes that there is a possibility of “recovery faster than expected”.
“The Board of Directors praised the authorities response to pandemics which included support for improvement for vulnerable groups, monetary policy easing and liquidity supply, the financial sector accommodating and regulatory policy, and continuing structural reform,” the IMF said to his executive body.
Consultation was held with India to assess the economic and financial state.
“The economic response of the authorities, which is fast and substantial, has included fiscal support, including enhanced support for vulnerable groups, monetary policy easing, liquidity supply, and the financial sector accommodating and regulatory policy.
Despite the pandemic, the authorities continued to introduce structural reforms, Including labor reform and privatization plan, “he added.
Reports on what is known as “Article IV Consultation” refers to the article in the IMF Agreement that requires periodic assessment, however, warns the risk of Pandemic Covid-19 lurking in front especially because of its destructive influence on community development.
“The economic outlook remains cloudy because of uncertainty related to pandemics that contribute to the risk of downside and reverse.
The continuous negative impact of Covid-19 concerning investment, human capital, and other growth drivers can extend recovery and have an impact on medium-term growth.” While benefits India from profitable demographics, disruption to access to education and training because pandemics can weigh on improvements in human capital, “he said.
Along with caution, the report added a note of optimism:” At the same time, recovery can also be faster than that Expected.
Faster and terapeutic vaccination can better help contain deployment and limit the impact of the pandemic.
In addition, the implementation of broad structural reforms that was announced could increase the potential for India’s growth.
“Report reports emphasize the importance of vaccination.” The Directors agreed that overcoming the health crisis remained a short-term policy priority.
In that context, they welcomed the increase in vaccination recently, “he said.
Looking back, the IMF noted” that India is one of the fastest growing economies in the world in the decade before the pandemic, lifting millions of poverty.
While the economy is moderation before the Covid-19 surprise, the pandemic implies an unprecedented challenge “.” Two Covid-19 waves caused a health and economic crisis, the economy gradually recovered.
Following the first wave, GDP contracted 7.3 percent unprecedented in FY (fiscal year) 2020/21.
The second wave caused sharply falling in activities, although smaller and shorter, and a recent high frequency indicator showed ongoing recovery.
“Growth is projected at 9.5 percent at FY2021 / 22 and 8.5 percent at FY2022 / 23,” IMF said.
While inflationary pressure has been higher, the actual inflation fell 5.6 percent in July, “returning to the RBI inflation target (Bank of India’s reserve) of 4.2 percent, driven by food prices and softer basic effects, he said.
IMF said that the fiscal deficit has increased to 8.5 percent for the central government and 12.8 percent for the state government because “contractions in economic activities, lower income, and support steps related to pandemics”.
Great corporations have benefited from ” It is easier to benefit from “conditions in the capital market” though “despite policy support, bank credit growth remains calm”.
Foreign exchange reserves have increased due to net inflows and enhancements on the current account, said, but are expected to “return to a deficit of about 1 percent of GDP at FY2021 / 22 due to gradual recovery in domestic and higher demand.
Oil prices”.
The IMF praised the Indian response ‘Swift, substantial’ on a pandemic
