The International Monetary Fund’s 2014 annual review of the Indian economy, released on March 11, 2015, has some good GDP news for India. Predictably, everybody focused mostly on the growth forecast for 2014-15 and for 2015-16 and (expectedly) missed out IMF’s reservations on a key ingredient that facilitates growth in any economy — interest rates.
There’s a bit of a story behind the IMF’s salubrious growth forecast. The original set of two IMF documents (in which Indian GDP was initially estimated to grow by 6.3 per cent in 2014-15 and by 6.5 per cent in 2015-16) had to be supplemented by two additional reports — one, a transcript of the discussion between IMF officials and media, and, two, a copy of the IMF survey which updated India’s growth forecast, in line with the government’s new methodology. Consequently, IMF now expects India’s GDP to grow by 7.2 per cent during fiscal 2014-15 and by 7.5 per cent during 2015-16.