Indian economic managers are unfazed by the revision of the country’s GDP growth projections. The International Monetary Fund (IMF) on Tuesday slashed India’s growth projection from the earlier 7.4 per cent to 6.8 per cent in its latest World Economic Outlook.
Despite the revisions in growth projections, India will be the fastest growing major economy in the world.
“Almost every country is slowing. In that context, India is doing better and is in a relative bright spot compared to the other countries in the region,” IMF Director of Asia and Pacific Department, Krishna Srinivasan told PTI in an interview. He added that the current overarching problem is due to the global conjuncture.
According to ratings agency Standard and Poor’s (S&P) India’s strong economic growth along with its sound external balance sheet is expected to neutralize the risks inherent in the global environment.
Finance Minister Nirmala Sitharaman, who is currently in the US to attend the IMF and World Bank meetings is confident that India would grow at about 7 per cent despite “extraneous” challenges.
“I am aware that growth forecasts around the world are being revised lower. We expect India’s growth rate to be around 7 per cent this financial year. More importantly, I am confident of India’s relative and absolute growth performance in the rest of the decade,” she said.
Earlier, the United Nations Conference on Trade and Development (UNCTAD) slashed India’s growth projection to 5.7 per cent from the previous 8.2 per cent for the current financial year. The Reserve Bank of India and Asian Development Bank have pegged India’s growth rate at 7 per cent from the previous 7.2 per cent and 7.5 per cent respectively.
Assocham Secretary General Deepak Sood noted that India’s growth opportunities at this juncture are unparalleled. “We should not worry too much about the growth projections, the focus should be on the fundamentals and when we consider that, we are on a solid ground,” Sood said, adding that there could be short term glitches driven by the geopolitical dynamics. “But these problems are short term for India…India is not decoupled… the global dynamics are impacting all countries but importantly, India is taking all measures to ensure that growth is on track,” Sood added.
At a press meet, Gopal Krishna Agarwal, national spokesperson of the BJP outlined factors that point to an economic revival. The Purchase Manager Index (PMI), an indicator of the economic trends in the manufacturing and service sectors, has shown a healthy increase in September. The services sector PMI stood at 54.3 while that of the manufacturing sector was at 55.1.
“Many countries are on the verge of sovereign default.. some have already defaulted. But India with its strong macro economic indicators is the fastest growing economy in the world,” he said.
Agarwal also said that the 15.5 per cent bank credit growth in August was the highest in nine years.
Meanwhile, a recently published report by the South China Morning Post (SCMP) noted that with Russia and China losing their lustre – at least in the medium term – bankers have looked to India as a “bright spark.”
Also read: India to grow at around 7% this year despite headwinds: Sitharaman
FM Sitharaman to hold a series of meetings in the US beginning tomorrow
