IMF says India should maintain vaccine momentum and accommodate policy


India is expected to maintain momentum for large-scale immunization, pursue political accommodations until the recovery is fully entrenched, and accelerate structural reforms while containing public debt vulnerabilities, the International Monetary Fund said.

In its annual Article IV consultation report released on Friday, the IMF said budget support backed by targeted spending on social protection, employment support and health spending is warranted until that the recovery is assured. He said maintaining an accommodative monetary policy remained appropriate, although high inflationary pressures needed to be closely monitored.

“Looking ahead, a well communicated plan for a gradual reduction in monetary policy support as the recovery strengthens would promote orderly market transitions,” he said.

The IMF has projected India’s growth for FY22 at 9.5% and FY 23 at 8.5%, making it the fastest growing large economy.

The statement highlighted the impact of the Covid19 pandemic on the economy. “A persistent negative impact of Covid-19 on investment, human capital and other growth drivers could prolong the recovery and impact growth in the medium term,” he said, adding that Economic outlook remained murky due to uncertainties associated with the pandemic contributing to both downside and upside risks.

He said faster vaccination and better treatment could help contain the spread and limit the impact of the pandemic and noted that the implementation of the recently announced sweeping structural reforms could increase the growth potential of the country. ‘India.

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