IMF Calls India Key Engine Of Global Growth

WASHINGTON, DC- The International Monetary Fund has described India as a key engine of global growth after the country’s economy expanded 7.8 per cent in the second quarter, exceeding the IMF’s expectations and the consensus among other observers.

The stronger-than-expected performance was driven by services and exports, even as India faced an energy price shock, said Julie Kozak, director of the IMF’s Communications Department.

“India’s real GDP in the second quarter grew by 7.8 per cent,” Kozak said at an IMF press briefing. “That was above our staff expectations and also the consensus among other observers.”

“This upward surprise was driven by stronger than expected activity in the services sector and also in exports,” she said.

“The outturn also underscores the resilience of the Indian economy, despite the energy price shock,” she said.

“It also means that, as we’ve been saying for quite some time, that India does remain a key growth engine for the world,” she added.

Kozak’s comments came as the IMF assessed India’s latest growth figures, macroeconomic data and the impact of higher crude oil prices on the major energy importer.

She said India’s latest GDP release incorporated a new index of industrial production and a new producer price index series. The changes, she said, should improve the country’s GDP estimates.

The IMF is also monitoring the impact of rising oil prices on India’s economy. Kozak noted that higher energy costs create pressure for all oil-importing countries.

She said many oil-importing countries had taken measures to limit the impact of the shock. In India’s case, she said, the rise in energy prices had come at a time when the country was in a stronger economic position.

“Some countries like India have — the shock has occurred at a time when the country has been in a stronger economic position, and that is the case for India,” Kozak said.

The IMF will announce its new forecasts for India in its October World Economic Outlook, Kozak said. Until then, she said, the Fund’s assessment was that India had shown “quite a lot of resilience to the energy price shock”.

India is among the world’s largest crude oil importers, making international oil prices an important factor for its import bill, current account and public finances. (IANS)