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