Prospects high for India's economic growth: IMF official

by Nidhi Bhati

International Monetary Fund (IMF)’s Chief of India Mission and Assistant Director of the Asia Pacific Alfred Schipke believes that the Indian economy has a potential to grow at high and sustainable levels. Though there are a few bottlenecks, but emphasis on public infrastructure investment and a robust financial system framework will help overcome them, he said. On inflation, Schipke stated that although it is expected to moderate in 2021, the inflationary risk for any broad-based cost-push factor needs to be closely monitored. He cautioned that surging commodity prices could lead to cost-push inflation. The IMF official also listed three challenges that the IMF sees the world facing currently. First is the race between mutating viruses and the rollout of the vaccines, where uncertainty is still relatively high. The second is incomplete recoveries. As per IMF, this year around 150 economies would report per capita income levels below 2019 levels. The third challenge is the Great Divergence, across countries and also within societies, driven by differences in resources and the strength of the policy response.