Days after the announcement of Indian-origin Gita Gopinath as the chief economist, the International Monetary Fund (IMF) projected India to be world’s fastest growing major economy for the current and next year.

Just a few days ahead of the IMF annual meeting in Bali, the international financial body expressed that the economic reforms carried out under PM Narendra Modi has led India to become the world’s fastest growing major economy – leaving China with 6.6% behind. And the trend of growth will continue in India through this year and the next year due to the major economic reforms made by the Indian government. With that in consideration, India kept up with 7.3 per cent growth projection for this year made in July.

The World Economic Outlook (WEO) stated that the major growth is because of reforms like “GST, inflation-targeting framework, the Insolvency and Bankruptcy Code, and steps to liberalize foreign investment” that has made doing business easier in India. However, other external factors like “the recent increase in oil prices and the tightening of global financial conditions” has resulted into a slowdown of economic growth of the country by 0.1% in July compared to what was projected; and yet, India remains the fastest growth rate for major economies.

Beyond the current and next year, the IMF projected that the growth rate will depend on how much the country improves depends on its structural reforms and still-favourable demographic dividend. Making further recommendations, the IMF suggests India to concentrate on improvising “bank credit and enhancing the efficiency of credit provision by accelerating the clean-up of bank and corporate balance sheets and improving the governance of public sector banks” for better growth.

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