In its semi-annual report, World Economic Outlook, ‘Navigating Global Divergences’ October 2023, the International Monetary Fund (IMF) has revised its projected GDP growth rate for India for 2023-24 to 6.3%, up from the earlier 6.1%. For India’s policymakers, it is a vindication of their short-term economic management. The success is sweeter as the IMF revised downwards world GDP growth projection, including China’s by 0.3 percentage points, to 4.2%. Official spokespersons have sought the IMF’s endorsement to silence its critics.
That the economies that were worst affected during the COVID-19 pandemic were also the ones to record a steep recovery is widely acknowledged. India, which was one of the worst affected, has followed the pattern. During the second quarter of 2020, India’s GDP contracted by 25.6%, quarter on quarter, the worst among the world’s major economies as reported by the then IMF Chief Economist, in a tweet on September 2, 2020. The output contraction in 2020-21, at 8.5% over the previous year, was one of the worst among the world’s large economies.
Taking a slightly longer view, India’s real (inflation adjusted) annual GDP growth rate slowed down from 6.8% in 2016-17 to 2.8% in 2019-20, immediately prior to the pandemic. Real per capita income level in 2021-22, at ₹1.09 lakh, was higher than that in 2019-20 by about ₹600. In the following year, 2022-23, recovery gained momentum as domestic supplies were restored and global supply chains were straightened out.
