Despite IMF’s Downward Revision, FM Says Economy Growing Fast

Sitharaman’s remarks come after the IMF trimmed India’s growth forecast to 6.1 percent.

Despite the IMF projecting a reduced growth rate for India, Union Finance Minister Nirmala Sitharaman said that country’s economy is “still growing as the fastest”.

(Photo: PTI)

Despite the International Monetary Fund (IMF) projecting a reduced growth rate for India, Union Finance Minister Nirmala Sitharaman said that the country's economy is "still growing fastest" on Thursday, 17 October.

The IMF on Tuesday, 15 October, had trimmed India’s growth forecast by 90 basic points to 6.1 percent.

On Thursday, the IMF said that though India has worked on the fundamentals of its economy, there are problems, including the long-term drivers of growth, that need to be addressed.

‘Investment in Human Capital is Top Priority’

"India has worked on the fundamentals (of its economy), but there are problems to be addressed. In the financial sector, especially non-banking institutions, there are steps taken now to consolidate banks. They ought to help resolve some of these issues," IMF Managing Director Kristalina Georgieva told reporters at a news conference.

"In India, what is critically important is to continue with addressing the long-term drivers of growth. Investment in human capital in India is a top priority. It has to continue bringing women in the labour force. It is very important. India has very talented women, but they stay at home," she said.

Georgieva said there has been “a very strong growth” in India over the last years and the IMF is projecting reasonably strong growth for the country.

However, "like the rest of the world, India is experiencing a slowdown. So slightly over six percent is what we expect to see in 2019," she said.

‘India’s Economy Still Growing Fastest’: Sitharaman

Union Finance Minister Nirmala Sitharaman told a group of Indian reporters that the Indian economy was growing at its fastest pace.

The minister is in Washington to attend the annual meeting of the IMF and the World Bank.

Sitharaman said she is "certainly not risking a comparison" with China, even though the two countries growth rates have been projected at 6.1 percent in a latest IMF report.

"The IMF (in its latest projections) reduces the growth (rate) for all the global economies. It reduces the growth for India too. But even otherwise, even with that India is still growing as the fastest growing economy," she said.

Observing that several things about the economy are sentiment driven, the Union finance minister said obviously the narrative is "it's not growing as much as it used to grow earlier".

“It’s not eight. It’s not seven. It’s come down to six and so on. Yes, all these are very important. But I don’t want to underestimate the potential that India is showing even in the adverse circumstances,” Sitharaman said.

(With inputs from PTI)