The chief of IMF, Kristalina Georgieva, has lauded India for taking “very decisive” steps to deal with the coronavirus pandemic and its economic consequences and asked the country to do more this year to support an accelerated transformation of the economy.
Speaking at a global media roundtable on Thursday, she predicted a less bad outlook for India in the upcoming World Economic Update due to the steps taken by it.
“When I called on everybody to stay tuned for January 26, that applies very much to India. You would see a picture in our update that is less bad. Why? Because the country actually has taken very decisive action, very decisive steps to deal with the pandemic and to deal with the economic consequences of it,” Georgieva said.
The IMF is scheduled to release its World Economic Update on January 26.
Talking about India, she said it was a very dramatic lockdown for a country of this size of the population with people clustered so closely together.
“Then India moved to more targeted restrictions and lockdowns. What we see is that that transition, combined with policy support, seems to have worked well. Why? Because if you look at mobility indicators, we are almost where we were before Covid in India, meaning that economic activities have been revitalised quite significantly,” she said.
“What the government has done on the monetary policy and the fiscal policy side is commendable. It is actually slightly above the average for emerging markets. Emerging markets on average have provided 6% of the GDP. In India, this is slightly above that. Good for India is that there is still space to do more. If you can do more, please do,” Georgieva said.
According to the IMF Managing Director, 2021 is the year to use that space.
“But use it wisely in a more targeted manner and to support an accelerated transformation of the economy. Because what we see is amazing how much faster structural change takes place. And policymakers ought to be leaning forward in this environment to support this structural transformation and to cushion the impact it has on those that are on the losing side of it,” she said.
The IMF in its October outlook projected India to contract by a massive 10.3% in 2020.
However, India is likely to bounce back with an impressive 8.8% growth rate in 2021, it had said.