India faced ‘very deep’ recession last year, to be the fastest growing economy in FY22: Gita Gopinath

International Monetary Fund's (IMF) Chief Economist Gita Gopinath on Wednesday said that India, which faced a “very deep” recession last year, is projected to grow at 9.5 per cent and would be the fastest-growing world economy in FY22.

In an exclusive interview with India Today, Gopinath said IMF downgraded India’s growth rate for FY22 by three percentage points from its earlier prediction of 12.5 per cent due to the severe second wave of COVID-19 pandemic in the country.

The Indian economy, which contracted by 7.3 per cent in FY21 due to the pandemic, is expected to grow at 8.5 per cent in FY23, according to the IMF's latest World Economic Outlook report.

Gopinath said, "Recovery is being seen in the manufacturing and services sector and that would help in generating employment in India,"   

"There is resilience in the Indian economy, while there are structural issues that need to be addressed," she added. India needs a much more resilient infrastructure for renewable energy, and the increase in fuel prices also poses a downside risk for the country, said Gopinath.

As per the IMF's projections, the US economy is likely to grow by 6 per cent this year, a downgrade from 7 per cent it had forecasted in July. China is projected to grow by 8 per cent in 2021, down from the 8.1 per cent forecast in July.

IMF, in its report, also highlighted that the pandemic-hobbled world economy may be recovering but its momentum has been weakened by a resurgent coronavirus even as inflation looms over the globe.

Gopinath also stated that one of the factors for downgrading growth forecast for US is the Delta variant of the coronavirus that stopped the momentum and disrupted supplies. Besides, US is also facing vaccine hesitancy, she added.

“Fuelled by the highly transmissible Delta variant, the recorded global COVID-19 death toll has risen close to 5 million... holding back a full return to normalcy," the economist said.

While talking about downgrade of Chinese growth projection, Gopinath said that property regulation was a key driving factor. The Chinese economy, which had already been downgraded earlier this year, is again facing significant risks, she said.

(Edited by Vivek Dubey)

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