IMF has said that the Indian economy is in fairly good shape, and it is likely to be less affected than other emerging economies if there is a further shock to the global economy.
Paul A Cashin, Assistant Director in the IMF’s Asia & Pacific Department, and mission chief of India, said this is because India has an inward domestically demand-oriented economy. The International Monetary Fund had, earlier this week, in its annual report, forecast India’s growth to slow to 6.6 per cent in the 2016-17 fiscal due to temporary disruptions caused by demonetisation.
But the IMF added that economic growth will bounce back to its expected growth of more than 8 per cent in the next few years. Cashin also said India is in a much better fiscal position than it was, and also much better in terms of its monetary framework and monetary policy.
International rating agency Moody’s Investors Service has predicted that India will be the fastest growing economy among G-20 countries clocking a 7(point)1 per cent growth in year 2017.
In the report titled ‘Modest Acceleration in the Global Economy, Moody said, Indian economy will be the fastest growing among the G-20 nations, though it slowed down in the fourth quarter of 2016 because of the demonetisation.
Moody also said, the continuing cyclical recovery in global economic activity with growth in G-20 countries picking up modestly to 3 per cent in 2017 and 2018 from 2.6 per cent in 2016.
The rating aganecy also said, that there is a high risk of a significant protectionist shift in US trade policy and could inflict lasting damage to the global economy.
Commenting on Asia, the agency said, China’s economy stabilised around the official growth target of 6.7 per cent in 2016 but will likely continue to decelerate to 6.3 per cent and 6 per cent in 2017 and 2018.
Foreign direct investment in the country grew 18 per cent in 2016, to 46 billion dollars, according to data released by the Department of Industrial Policy and Promotion.
The sectors which attracted the highest foreign inflows include services, telecom, trading, computer hardware and software, and automobiles. The bulk of FDI came in from Singapore, Mauritius, the Netherlands and Japan.