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Impact on India minimal: IMF

NEW DELHI: Even as the global financial meltdown continues to spread like a contagion across shores wrecking economies and financial institutions, the International Monetary Fund (IMF) has projected its impact on India as minimal.

At a press conference on the ‘World Economic Outlook’ in Washington earlier this week, IMF’s Economic Counsellor & Director (Research Department) Oliver Blanchard noted that the Indian economy would continue to do well despite the impact of the global liquidity crunch. ’“We don’t see [a] major drag from this impact on the country…Overall, we see the Indian economy continuing to perform well.”

As per the projections made by the IMF, India is expected to post a GDP (gross domestic product) growth of 7.9 per cent during the current fiscal. Mr. Blanchard pointed out that like all other countries, India too, would be affected by the global slowdown.

“We are projecting that the growth in India will come down from 8 per cent in 2008 [2008-09] to 7 per cent in 2009 [2009-10]. But 7 per cent is still a strong rate of growth,” he said. At a time when global economies are on a downhill owing to the financial turmoil, a seven per cent growth would be a reflection of India’s internal growth dynamics. As for the specific reasons for the comparatively mild impact on the country’s economy, Mr. Blanchard said: “That reflects the fact that India is still largely a closed economy, has strong internal growth dynamics, from rapid productive growth, from its process of integration into the global economy that is still continuing.”

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