International Monetary Fund Managing Director Christine Lagarde said on Sunday that the Indian economy is on a “very solid track” for the medium term, and that recent structural reforms will help revive job growth, NDTV reported.
The IMF had on Tuesday cut India’s economic growth forecast for the 2017-’18 financial year to 6.7%, citing the slowdown in momentum because of demonetisation last year and the launch of the Goods and Services Tax in July.
Calling the GST a “monumental effort”, Lagarde said it is “hardly surprising” that there is a “little bit of a short-term slowdown” because of it.
“...We believe that India is for the medium and long-term on a growth track that is much more solid as a result of the structural reforms that have been conducted in India in the last couple of years,” she said in Washington, DC. “We very much hope that the combination of fiscal [consolidation efforts], because the deficit has been reduced, inflation has been down significantly, and the structural reforms, will actually deliver the jobs that the Indian population, particularly the young Indian people expect in the future,” she said.
Meanwhile, Niti Aayog Vice Chairman Rajiv Kumar said the economic slowdown that began in 2013-’14 has bottomed out and that the Gross Domestic Product is likely to grow 6.9%-7% in 2017-’18 and 7.5% the year after. India’s GDP growth rate fell to 5.7% for the first quarter of 2017-’18.