The country’s economy is expected to grow at 8.2 per cent in 2022-23, which is 0.8 per cent lower
The country’s economy is expected to grow at 8.2 per cent in 2022-23, which is 0.8 per cent lower
A senior International Monetary Fund (IMF) official said the rise in oil prices due to the Ukrainian war has driven up inflation in India, which necessitates monetary tightening and measures to address structural weaknesses.
According to projections, the country’s economy is expected to grow at 8.2 per cent in 2022-23, down from 0.8 per cent, said Anne-Marie Gulde-Wulf, acting director of the IMF’s Asia and Pacific Department.
“So while still being strong, this is a significant downside. We really see tough policy tradeoffs for policymakers who support controlling inflation around the world,” he told reporters at a press conference here. Which has already started to grow.”
“The reason for the rise in inflation is actually the outbreak from the war in Ukraine, where India is particularly dependent on imports of oil and commodities,” he said.
In the short term, we think a commodity fiscal stance is appropriate to support vulnerable households and focus on infrastructure investments, the IMF official said in response to a question.
He recommended monetary tightening and measures to check structural weaknesses.
“Well communicated monetary policy action is needed, but perhaps some monetary tightening is needed,” he said.
“To enhance India’s growth potential, it is important to address the structural weaknesses of the Indian economy that provide barriers to achieving long-lasting growth. These constraints are in the labor market, land market, better educational outcomes , and are also getting a higher share of women in the labor force,” the IMF official said.
“So, overall, the potential is certainly there but it will require policy action,” she said.