IMF Accredits India’s Economy Recovery After COVID-19 Shock

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IMF data says that India’s economy is recovering. We estimate that the gross domestic product will expand by 9.5% this year, and 8.5% next year, which is one of the highest growth rates of any large economy. Granted, it is from a low base, but the economy is recovering, and that gives hope.

New Delhi (ABC Live India): India’s economy is poised for a rebound after enduring a second wave of COVID-19 infections this year that further constrained activity and took a heavy toll on its people.

“What happens in India has a big impact, both in the region and in the world,” Luis Breuer, IMF’s senior resident representative to India, said in a recent IMF podcast. “You're talking about a large slice of humanity and the global economy.”

ndia’s broad range of fiscal, monetary and health responses to the crisis supported its recovery and, along with economic reforms, are helping to mitigate a longer-lasting adverse impact of the crisis, according to the latest annual review by IMF staff.

Though policy steps helped mitigate the pandemic, it’s still likely to result in greater poverty and inequality. And the path of recovery will follow the path of the virus.

New infections have fallen significantly and vaccination rates have risen to surpass a billion doses, although resurgence is not impossible even if it seems unlikely today. “There's a lot of uncertainty about COVID,” Breuer said. “We cannot rule out future waves.”

IMF data says that India’s economy is recovering. We estimate that the gross domestic product will expand by 9.5% this year, and 8.5% next year, which is one of the highest growth rates of any large economy. Granted, it is from a low base, but the economy is recovering, and that gives hope. Obviously, we can't lower our guards. There's a lot of uncertainty about COVID and about mutations and about vaccination rates and so forth. But so far, things have gotten much better to a very difficult situation that was in the country a few months ago, said Luis Breuer.

Now of course, India is a very large country. They need to administer perhaps another billion. And these are very, very large numbers. But the country is making progress. The production of vaccines has increased more than 100% in the last, I would say, four months. And so, right now almost 30% of the population has received two doses, and about roughly half of adults have received one dose. Now, that's a huge progress, but again, much is left to do, so India continues to push for vaccinations across the country. And, in a also very positive note for other countries, has announced that they would resume vaccine exports after about six months when they were forced to stop exports because of the terrible second wave that hit this country, starting in March in Mumbai, and then extending to the whole country in the following weeks and months said IMF Representative in India.

To read the complete transcript of Luis Breuer, IMF Representative in India podcast click here.

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