Christine Lagarde, managing director of the International Monetary Fund, says that India a “bright spot” on a cloudy global horizon. She declared that India has the potential to double the size of its economy by 2019 compared to 2009.
During her visit to India, Lagarde commented, “India’s GDP will exceed that of Japan and Germany combined. Indian output will also exceed the combined output of the three next largest emerging market economies – Russia, Brazil and Indonesia…This year already, India’s growth rate is expected to exceed that of China,” reported Economic Times.
Five positive actions that have caught the attention of the IMF chief are:
- The Modi government and India’s central bank led by governor Raghuram Rajan who are “skillfully shifting the focus to good macroeconomic management, transparent government, and inclusive development,” said Lagarde in an interview to Times of India.
- The 2016 Indian budget “struck a good growth-equity balance. There’s emphasis on increasing the provision of public infrastructure, and within a fiscally-responsible framework,” she said.
- India’s fast growing economy in which the IMF expects India’s GDP growth to pick up to 7.2% in the current fiscal and accelerate to 7.5% in 2015-16 – making India the fastest growing large economy in the world. Lagarde commented, “India is indeed a bright spot, and economic development holds much promise. India has an opportunity to become one of the world’s most dynamic economies. My message will be: Seize it!”
- “India has prepared better than most emerging-market economies for external shocks by shrinking current account deficit and increasing stock of international reserves; the higher GDP growth expected now, should help,” Lagarde noted.
- India’s subsidy reforms for reducing poverty, where the government has put in place a program to ensure welfare payments reach intended beneficiaries is commendable, Lagarde feels.