International Monetary Fund Managing Director Kristalina Georgieva on Thursday praised India for taking “very decisive” steps to deal with the coronavirus pandemic and its economic consequences, reported PTI. She also asked India to do more in 2021 in order to support an accelerated transformation of the economy.
“When I called on everybody to stay tuned for January 26, that applies very much to India,” she said at a global media round table. “You would see a picture in our update that is less bad. Why? Because the country actually has taken very decisive action, very decisive steps to deal with the pandemic and to deal with the economic consequences of it.”
The International Monetary Fund will release its World Economic Update on January 26.
Georgieva also lauded the Indian government for its monetary and fiscal decisions. “Emerging markets on average have provided 6% of the Gross Domestic Product. In India, this is slightly above that. Good for India is that there is still space to do more...If you can do more, please do.”
She advised India to use this space in a “more targeted manner” to support the accelerated growth of the economy and lauded the country for fast structural reforms. She urged policymakers to support these reforms. “No question those reforms, and actually that applies very much to South Africa... will determine competitiveness in the future,” the IMF managing director said. “We need higher productivity. We need more vibrant and inclusive economies. And they are not going to fall from the sky. There have to be reforms that support them.”
The IMF managing director also said that the coronavirus-induced lockdown was “dramatic” for a country with such a high population, and where people are clustered together. “[But] then India moved to more targeted restrictions and lockdowns,” she said. “What we see is that that transition, combined with policy support, seems to have worked well.”
Georgieva spoke about gender inequality in India, saying it was “scary” to see how it was losing ground in the past few months. “Women are on the front line,” she said. “Labour market participation in India for women has been low. It is shrinking...I know the government is paying attention, it is moving in that [direction], but there is so much space to tap into the productive potential of women and the entrepreneurial potential of women.”
In October, the IMF had predicted that the Indian economy would contract by 10.3% in 2020-’21, owing to the lockdowns imposed to combat the coronavirus pandemic. The IMF also forecast that India would grow at 8.8% in 2021-’22.