Ahead of IMF meet, Christine Lagarde says India 'growth bright spot'

WASHINGTON: Ahead of the next week's IMF-World Bank Spring Meetings, IMF chief Christine Lagarde today described India as "growth bright spot" and said New Delhi should focus on labour and product market reforms.

"Forecasts for most emerging and developing economies are slightly worse than last year...(but) India is a growth bright spot," she said at the Atlantic Council.

China is slowing, Brazil is stagnating, many parts of the Middle East are beset with political and economic turmoil and Russia is experiencing economic difficulties, she added.

Lagarde made these comments ahead of the IMF-World Bank Spring Meetings on April 17-19 here, which will be attended by Indian Finance Minister Arun Jaitley, Reserve Bank of India Governor Raghuram Rajan, among others.

Referring to the reforms needed, the Managing Director of IMF said emerging market economies such as Indonesia and Russia can reap productivity gains by easing investment limits and improving the business climate.

"In other countries such as Brazil, India, and South Africa, the focus should be on reforms to education, labour, and product markets," she said.

Earlier in the day, global rating agency Moody's upgraded India's credit outlook to positive, while it peer Fitch talked about possibility of rating upgrade on improvement in fiscal position of the government.

Fitch also raised India's GDP growth forecast for 2015-16 fiscal to 8 per cent as against RBI's estimate of 7.8 per cent.

On the global economy, the IMF chief said advanced economies are doing slightly better than last year.

"The recovery is firming up in the United States and the United Kingdom. Prospects in the Euro Area are improving, with the welcome support of the ECB's monetary easing," she said.

The IMF, she said, would release the 'World Economic Outlook' next week.