IMF commends India’s ‘swift’ response to pandemic

UNITED NATIONS: The International Monetary Fund (IMF) has commended Indian authorities’ “swit and substantial” response to the Covid-19 pandemic and noted that there is the possibility of “a faster than expected recovery.”

“Directors commended the authorities’ response to the pandemic which includes scaled-up support to vulnerable groups, monetary policy easing and liquidity provision, accommodative financial sector and regulatory policies, and continued structural reforms,” the IMF said on Friday reporting on its executive board’s consultations held with India to assess the state of its economy and finances.

India reported a total of 15,981 fresh Covid cases and 166 deaths in the last 24 hours, the Union Health Ministry said in its latest update on Saturday.

The new fatalities increased the overall death toll to 4,51,980, the Ministry said, adding that the single-day cases have remained less than 20,000 for the last eight days.

“The authorities’ economic response, which was swit and substantial, has included fiscal support, including scaled-up support to vulnerable groups, monetary policy easing, liquidity provision, and accommodative financial sector and regulatory policies.

“Despite the pandemic, the authorities have continued to introduce structural reforms, including labour reforms and a privatisation plan,” it added.

The report of what is known as “Article IV Consultations” in reference to the article in the IMF agreement requiring the periodic assessment, however, warned of the risks from the Covid-19 pandemic lurking ahead especially due to its deleterious effect on people’s development.

“The economic outlook remains clouded due to pandemic-related uncertainties contributing to both downside and upside risks.

“A persistent negative impact of Covid-19 on investment, human capital, and other growth drivers could prolong the recovery and impact medium-term growth.

“While India benefits from favourable demographics, disruption to access to education and training due to the pandemic could weigh on improvements in human capital,” it said.

Along with the caution, the report added a note of optimism: “At the same time, the recovery could also be faster than expected.

“Faster vaccination and beter therapeutics could help contain the spread and limit the impact of the pandemic.

“In addition, successful implementation of the announced wide-ranging structural reforms could increase India’s growth potential.”

The report repeatedly emphasised the importance of vaccinations.