International Monetary Fund sees Indian economy growing 11.5% in 2021

  • International Monetary Fund sees Indian economy growing 11.5% in 2021

International Monetary Fund sees Indian economy growing 11.5% in 2021

Easing monetary policy has benefitted emerging markets, including Egypt, since the onset of the COVID-19 pandemic, and helped in the rebound that these markets witnessed in capital inflows and foreign exchange flows, said Fabio Natalucci, deputy director of the monetary and capital markets department of the International Monetary Fund (IMF).

The IMF expects vaccines and additional fiscal spending by some major economies, including the USA and Japan, will underpin the economy, and the normalization of the economic activity will continue in the second half of 2021. In the downside scenario, the report said, global activity falls below baseline by roughly 0.75 percent in 2021 but starts to return toward baseline in 2022.

Pakistan's GDP growth forecast is projected at 1.5% for the current fiscal year as the difference from October's last projection was 0.5%, according to the Economic Outlook for 2021 update released by the International Monetary Fund.

However, the Washington-based crisis lender warned the outlook is beset by "extraordinary uncertainty", and governments will need to continue to act to prevent lasting damage after Covid-19 caused the worst peacetime economic crisis since the Great Depression.

Those developments create "a stronger starting point for the 2021-22 global outlook".

"Policy actions should ensure effective support until the recovery is firmly underway, with an emphasis on advancing key imperatives of raising potential output, ensuring participatory growth that benefits all, and accelerating the transition to lower carbon dependence", Gopinath said.

And newly installed President Joe Biden is pushing for a massive $1.9 trillion rescue plan that would provide support to families, businesses and struggling state and local governments.

But it also warned that surging infections in late 2020, renewed lockdowns and logistical problems with vaccine distribution could hamstring growth.

The IMF lowered its forecasts for the 19-country euro area and the United Kingdom for this year - still pointing to growth, just less than it expected last fall, and in contrast to a brightening picture in the US and the rest of the world.

The euro area growth estimate was cut a full point to 4.2%, with significant downgrades for Germany, France, Spain and Italy.