The International Monetary Fund has officially declared India to be the world’s sixth largest economy as it displaced France with a narrow margin to gain the coveted position in the global economy. the United States, China, Japan, Germany and United Kingdom are the five economies that are ahead of India at the moment. However, the gap between India and France is expected to be closed down by the European Union member.
“This is a landmark development for India,” said an official in the finance ministry in New Delhi to the media. The official stressed on the more far-reaching impacts of the move than are immediately apparent even though the announcement might look symbolic.
“These horse races and their numbers matter and work to shape opinion, and more importantly we hope, influence investment decisions,” the official added.
India has got a steady stream of good news from the ongoing spring meetings of the World Bank-IMF group. However, it has also brought with it a fair share of caveats, admonitions and prescriptions on issues such as the immediate need for reforms in labour laws and land acquisition.
The measures by the Indian government of demonetization and the single tax economy have had their negative impact on the Indian economy, noted both the World Bank and IMF while also mentioning that the economy has finally overcome the adverse effects of those two monetary measures.
The forecast for the Indian economy had been kept unchanged at 7.4 per cent for 2018 and 7.8 per cent for 2019 by the IMF in its forecast. The rate was at 6.7 per cent in 2017.
According to the database of the International Monetary Fund’s World Economic Outlook (WEO) for April 2018, $2.6 trillion was the Gross Domestic Product (GDP) or the worth of the Indian economy for 2017. This number is more than the threshold of $2.5 trillion that economists put on to distinguish between a big economy and the so-called pretenders.
Compared to the IMF, more bullish statements comments were drawn by the Indian economy from the World Bank which pegged its forecast for the growth of the economy at 7.3% in 2018 and then to subsequently stabilize at 7.5 per cent for the period of 2019 and 2020.
The World Bank noted that the growth in the Indian economy not only marked its moving away from its slight fall because of demonetization and imposition of nation-wide single tax regimen and it was now in a position boost the entire economy of South Asia to be recognized as the fastest growing region in the world yet again.
(Adapted from HindustanTimes.com)