International Monetary Fund (IMF) on 20 February 2014 released its annual report on the state of the Indian economy and projected that India’s economic growth for 2014-15 will be 5.4 percent. In its release it said that India has restored macroeconomic and financial stability but structural impediments to growth and persistently high inflation is the major areas of concern. It has also suggested India to strengthen its inflation management policies and do away with supply bottlenecks for better GDP.
In its forecast, IMF (multilateral agency) said that inflation driven food prices seems to remain near double digits in 2014-15. It also said that the tight monetary policy would slow the growth recovery. In its forecast for the fiscal year 2013-14, it projected that India’s growth will be 4.6 percent and will pick up to 5.4 percent in 2014-15 at factor cost. These projections of India were a conclusion of its annual discussions with India.
India’s National Food Security Act has been described by IMF as landmark legislation which will ensure that a majority of population of the country will have access to adequate quantities of food at affordable prices. IMF also said that the Consumer Price Index (CPI) could push up due to weaker rupees and ongoing energy price increases.
To tackle price rise, IMF has asked the high Inflation countries of G20 nations like India to strengthen their fiscal and monetary policy framework. For G20 countries, IMF has also asked to better their supply infrastructure, which will help in doing away bottlenecks to achieve faster growth poverty reduction and job creation.
The G20 leaders’ meet will start in Sydney on 22 February 2014.
Earlier on 17 February 2014, the Union Finance Minister of India, P Chidambaram in his interim budget projected that the economy will pick up and the objective of 6 percent growth is doable in the fiscal year 2014-15. RBI appointed committee has also suggested focus of the central bank should be towards CPI inflation and its recommendation it has asked to bring down the CPI inflation to 8 percent in 2014-15 and to 6 percent by 2016.
About the International Monetary Fund (IMF)
The International Monetary Fund (IMF) is an organization of 188 countries and is working to foster global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth, and reduce poverty around the world. It is headquartered in Washington, US. The IMF has played a part in shaping the global economy since the end of World War II.
When: 20 February 2014