Washington: A high growth rate for India, as projected in the latest World Economic Outlook, is not only healthy for the country but also positive news for the world, Managing Director of the International Monetary Fund Kristalina Georgieva has said.
The IMF, early this week, projected a fairly robust growth of 8.2 per cent for India in 2022, making it the fastest-growing major economy in the world, almost twice faster than China's 4.4 per cent.
The global growth has been projected at 3.6 per cent in 2022, down from 6.1 per cent in 2021.
"India is one of the economies that are growing at a high rate. Even with the small downgrade, growth is projected for this year to be 8.2 percent. Healthy for India, but also positive in a world where growth slowdown is creating a major problem, Georgieva told reporters at a news conference here on the sidelines of the annual spring meeting of the IMF and the World Bank on Wednesday.
On Monday, she met the visiting Indian Finance Minister Nirmala Sitharaman.
She said India already plays a very important international role. By exporting vaccines during the pandemic, it has delivered a global public good, she said in response to a question.
India is also committed to lead in renewable energy with the International Solar Alliance, another area where the world needs more determination, more progress, she said.
And, it is a country that is on the frontline of digital currencies, especially central bank digital currency and how it handles a reduction of risk from crypto assets for the Indian people and businesses, Georgieva said. Noting that next year India is going to be the Chair of the G20, Georgieva said she very much looks forward to working with the country on many key global cooperation issues, including the 16th General Review of Quotas that should be finalised by the end of next year.
Moreover, Applauding India for prioritising public investment in its annual budget, the International Monetary Fund has urged the country to prioritise food security and expand transfers to the vulnerable in the wake of the global economic crisis triggered by the war in Ukraine.
Paolo Mauro, Deputy Director, Fiscal Affairs Department of the IMF told reporters on Wednesday during a news conference held here on the sidelines of the annual Spring meeting of the IMF and the World Bank that the challenges coming from the economic consequences of Russia's invasion of Ukraine were quite sever.
Observing that inflation in India is somewhat elevated, he said that it is a little bit above the comfort zone for the Central Bank, which is already addressing that issue. On the fiscal front, the budget is approximately neutral, which seems to be sensible at this time, he said in response to a question.
But given the rise in food prices, given the rise in energy prices, clearly this is a situation in which households are feeling the pain of the situation, Mauro said.
So, what we recommend here is to prioritise food security first and foremost, expand transfers to the vulnerable. India has an effective history of in kind transfers and also cash transfers to the population. We certainly would want that to continue and to be expanded, the top IMF official said.
Beyond that, in the budget, one good part of that is that public investment is being prioritised, Mauro said.
The country has major infrastructure needs, and we would certainly encourage that that investment on infrastructure be directed in some part to renewables because it is so important for India to transition away from coal and move toward more renewable sources of energy that creates jobs, and also reduces local pollution, which has so many adverse effects on health, said the top IMF official.