Christine Lagarde’s statement is followed by IMF and World Bank downgrading India’s GDP forecast for the year 2017-18.
Amid frequent reports of India’s slowing growth rate, International Monetary Fund (IMF) chief Christine Lagarde has said that the Indian economy is on a “very solid track” in the mid-term.
Addressing annual meeting of the IMF at its Washington headquarters on Saturday she said, “Turning to India… we have slightly downgraded India; but we believe that India is for the medium and long-term on a growth track that is much more solid as a result of the structural reforms that have been conducted in India in the last couple of years,” the IMF Managing Director said.
Lagarde further said that “a little bit of a short-term slowdown” as a result of a two monumental reforms – demonetisation and Goods and Services Tax (GST) is hardly surprising. “But for the medium term, we see a very solid track ahead for the Indian economy,” she added.
Lagarde also predicted that the two structural reforms will deliver jobs in the near future.
Meanwhile, Union Finance Minister Arun Jaitley, who participated at the IMF Annual Meeting, has reiterated that the structural reforms will serve the country well in the days to come.
“When the world was growing at two-and-a-half per cent, India was the fastest-growing major economy in the world. That was a time to really fix the roof. You don’t have to wait for a downward slide in order to do it,” Jaitley said.
Before arriving at Washington, Arun Jaitley visited New York where he met Investors in partnership with Bank of America and confederation of Indian Industries (CII) and also held a roundtable meeting of CEOs of USIBC-CII.
In Washington, Jaitley held bilateral meeting with US Commerce Secretary, addressed seminar on “India Opportunity Conference” and attended G-20 Finance Ministers. Arun Jaitley will conclude his one week official US visit on Sunday.
IMF chief Christine Lagarde’s statement comes a few days after IMF and World Bank downgraded India’s GDP forecast for the year 2017-18. While the World Bank reduced it to 7% for 2017-18 from 7.2%, IMF has scaled down India’s growth forecast to 6.7% from 7.2%.
Both the international financial institutions have attributed India’s economic slowdown, at least partly, to demonetisation and the implementation of Goods and Services Tax (GST).