‘In­dia may see 7% growth dur­ing the rest of the year’

The Hindu Business Line - - FRONT PAGE - SURABHI

“As com­mod­ity prices im­prove, the pres­sures of in­fla­tion and bal­ance of pay­ments for im­port­ing na­tions will re­turn but it is un­likely that prices will surge to the pre-2014 level,” said Su­bir Gokarn, In­dia’s Ex­ec­u­tive Di­rec­tor to the In­ter­na­tional Mone­tary Fund.

In an in­ter­view with Busi­nessLine, the for­mer Deputy Gov­er­nor of the RBI said that the IMF’s re­vised growth pro­jec­tion of 6.7 per cent for In­dia is largely due to the first-quar­ter GDP growth es­ti­mates. “It would still sug­gest that the rest of the year will see 7 per cent growth.”

The slow­down, he said, is be­ing seen as tran­si­tory, the re­sult of fac­tors such as the cur­rency ex­change ini­tia­tive and the roll­out of the goods and ser­vices tax.

Once the in­flu­ence of these fac­tors has abated, the econ­omy will re­turn to a higher growth rate, he said. The fore­cast for 2018-19 is 7 per cent. Fur­ther re­form ini­tia­tives will con­trib­ute to achiev­ing 8 per cent-plus growth.

The IMF’s higher growth pro­jec­tion for the global econ­omy, Gokarn said, is a pos­i­tive de­vel­op­ment for all coun­tries. Many emerg­ing economies had suf­fered due to the com­mod­ity price de­cline in the last three years.

Prices are now start­ing to sta­bilise be­cause of the re­vival in global de­mand, and sup­ply man­age­ment be­ing put in place, he added.

In­ter­view Su­bir Gokarn, ED, IMF

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