The International Monetary Fund, the global lender, has published its flagship biannual survey – World Economic Outlook yesterday.This is the first report under the newly appointed Indian American IMF chief economist- Gita Gopinath. The document forecasts global and national economic growth in near and medium context. The document is generally published in the month of October and March and policymakers in more 180 countries eagerly wait for this report. The report has very positive findings about India with the country being the fastest growing large economy in the world in 2018. For the upcoming years too, India will remain the fastest growing emerging economy, ahead of China. India is expected to grow at 7.3 and 7.5 percent for 2020 and 2021 respectively. On the other hand Chinese economic growth will moderate to 6.3 and 6.1 percent in 2020 and 2021.
Pakistan’s economic growth was 5.2 percent in 2018 but it will moderate to 2.9 and 2.8 percent in 2020 and 2021 respectively. Inflation which was 3.9 percent in 2018 will increase to 7.6 percent in 2019 and 7 percent in 2020. The high inflation and low GDP growth clearly indicates that Pakistan’s economy is not on track. In India, Inflation is at an all-time low and economic growth is very high. India’s economic condition is expected to improve further in the upcoming years while Pakistan will deteriorate due to poor policies. India is ahead of hostile neighbors (China and Pakistan) in terms policy decisions and macroeconomic fundamentals. The growth in China and Pakistan is forecasted to decrease for next few years while the Indian economy continues northward trajectory.
Earlier IMF communications director Gerry Rice said, “India has of course been one of the world’s fastest-growing large economies of late, with growth averaging about seven percent over the past five years,” on India’s economic development under Modi government. “Important reforms have been implemented and we feel more reforms are needed to sustain this high growth, including to harness the demographic dividend opportunity, which India has,” he added.
The policy analysts, economists and corporate houses around the globe have given very positive reviews about the economic policies of the Modi government. Two of the most important economic reforms have been in the fields of indirect taxation and the insolvency process. The GST was waiting for implementation in the policy corridors for almost three decades as the previous governments could not bring all the stakeholders together to implement the uniform indirect taxation. But the Modi government has been able to build consensus for the implementation of GST in one of the most complex markets around the world. GST has been helpful in increasing the number of indirect as well as direct taxpayers. Top economists have predicted that GST will improve the GDP growth of the country by 1-2 percent.
“It is a delicate moment for the global economy,” said Gita Gopinath, the newly appointed IMF director. The global growth is on downward trajectory with 4 percent in 2017 to 3.6 percent in 2018. The IMF projected further moderation to 3.3 percent in 2019. The Indian economy is expanding at a fast pace while global economic growth is slowing down. This is due efforts of the Modi government and it will definitely reap the political dividends for the party in the upcoming elections.
