Days after the International Monetary Fund (IMF) pared India’s GDP growth projection for the year 2017 and 2018, its Managing Director Christine Lagarde has expressed confidence that the series of reforms like demonetisation and Goods and Services Tax (GST) regime have put country’s economy on a very solid track in the mid-term. Describing these structural reforms as ‘monumental effort’, she said that it is hardly surprising that here is a little bit of a short-term slowdown as a result, but for the medium term, they see a very solid track ahead for the Indian economy.
IMF chief further indicated that metrics of inflation, fiscal deficit and structural reforms would deliver jobs. She also said that they hope that the combination of fiscal, because the deficit has been reduced, inflation has been down significantly, and the structural reforms will actually deliver the jobs that the Indian population, particularly the young Indian people expect in the future.
Last week, the IMF in its latest flagship World Economic Outlook has lowered India’s Gross Domestic Product (GDP) growth forecast for 2017 by 0.5 percentage points to 6.7 percent, primarily because of the lingering impact of demonetisation as well as disruption caused by the goods and services tax (GST) regime. It has also trimmed the growth projection for 2018 to 7.4 percent from 7.7 percent forecasted earlier in April and June.
