India in midst of significant economic slowdown, says IMF

Washington, December 24

India is now in the midst of a significant economic slowdown, the International Monetary Fund (IMF) has said, urging the government to take urgent policy actions to address the current prolonged downturn.

In its report released on Monday, the IMF Directors noted that India’s rapid economic expansion in recent years has lifted millions of people out of poverty. However, in the first half of 2019, a combination of factors led to subdued economic growth in India.

“The issue in India currently is the growth slowdown. We still believe it is mostly cyclical, not structural… because of the financial sector issues, we think the recovery will be not as quickly as we thought earlier. That’s the main issue,” Ranil Salgado, Mission Chief for India in the IMF Asia and Pacific Department said in an interview as it released its annual staff report on India.

With risks to the outlook tilted to the downside, the IMF Directors called for continued sound macroeconomic management. They saw an opportunity with the strong mandate of the new government to reinvigorate the reform agenda to boost inclusive and sustainable growth, the report said. PTI