India is the bright spot on the dark global horizon: IMF MD Kristalina Georgieva

“India deserves to be called a bright spot on this otherwise dark horizon because it has been a fast-growing economy, even during these difficult times, but most importantly, this growth is underpinned by structural reforms,” Georgieva said.

India’s economy posted double-digit growth of 13.5 percent in April-June quarter, as a favourable base effect and improved activities following the relaxation of pandemic-led restrictions outweighed the rippling effects of geopolitical and global concerns.

On Wednesday, IMF chief economist Pierre-Olivier Gourinchas called India “a bright light” as its growth is still fairly robust.

“India is one of the largest economies. So, when it’s really growing at solid rates like 6.8 or 6.1, it is really noticeable. In a picture where all the other economies and advanced economies, rarely grow at that speed, but even other large countries don’t do as well in the current year or next year in our projections. So it’s certainly extending out,” Gourinchas said.

The Chief economist, however, noted that the country needed key structural reforms in order to achieve the ambitious target of being a USD 10 trillion economy.

These statements by the IMF officials came at a time the IMF cut India’s FY23 GDP forecast to 6.8% from its earlier projection of 7.4%.

This was the third downward revision for India. FY23 GDP forecast was downgraded to 7.4% in July from 8.2% estimated in April keeping in view negative changes in external conditions, besides rapid monetary policy tightening.

Growth projection was cut in April to 8.2% from 9% owing to higher commodity prices.