The Indian economy is expected to recover significantly by next year on account of the series of policy decisions taken by the government, a top International Monetary Fund (IMF) official said today. "(India's) growth will recover significantly next year," IMF Director for Asia Pacific Department Anoop Singh told reporters here on the sidelines of its annual plenary meeting.
He was responding to questions on the latest projection by the World Economic Outlook of the IMF, which has projected a steep fall in the Indian growth rate to about 3.8% for the current fiscal. Finance Minister P Chidambaram yesterday said he did not share the IMF's "pessimism". "We expect these measures to show their impact from the second half of the current fiscal and believe that the Indian economy will grow at over 5.0 per cent and perhaps closer to 5.5% in 2013-14. "I know that the World Economic Outlook report (of the IMF) does not share my optimism, but I may tell you that we do not share their pessimism," Chidambaram told a Washington think-tank on yesterday.
Singh explained that the difference between the Indian and IMF's perception is only a matter of few quarters as it wants to give India some time to see the results of the positive policy decisions taken by the Union Cabinet. "There are always lags. There has been monitory tightening. There are shocks from external forces. So the question is how quickly India responds. We think they will take a few quarters. By next year it (growth) should be well above four and half and well above five (per cent)," he said.
Singh said the Indian government recently has taken a lot of measures. "The main difference in our prediction, it is going to take a few quarters in our view. I hope we are wrong. The recovery comes much faster," he said.