India bright spot in global economy, will clock 7.2% growth: IMF

NEW DELHI: Terming India a bright spot in the "cloudy" global economy, IMF Managing Director Christine Lagarde today said the country will clock 7.2 per cent growth in the current fiscal and its GDP will exceed combined total of Japan and Germany by 2019.

"In this cloudy global horizon, India is a bright spot. Recent policy reforms and improved business confidence have provided a booster shot to economic activity," she said while speaking at a function at Lady Shri Ram College here.

On introduction of new series of national accounts with base year 2011-12, she said, "Using India's new GDP series, the IMF expects growth to pick up to 7.2 per cent this fiscal year and accelerate further to 7.5 per cent next year --- making India the fastest growing large economy in the world."

The IMF chief further said, "Indeed, a brighter future is being forged right before your eyes. By 2019, the economy will more than double in size compared to 2009."

When adjusting for differences in purchasing prices between economies, India's GDP will exceed that of Japan and Germany combined, she said adding it will also exceed the combined output of the three next largest emerging market economies --- Russia, Brazil, and Indonesia.

Lagarde further said, "Just as many countries around the world are grappling with low growth, India has been marching in the opposite direction."

India's growth rate this year is expected to exceed that of China, she said, adding the country will also become the most populous in the world by 2030.

The IMF chief believes that the conditions are ripe for India to reap the demographic dividend and become a key engine for global growth as it (the country) is on the verge of a new chapter, filled with immense promise.

On world economy, she said, "More than six years after the global financial crisis, the recovery remains too slow, too brittle, and too lopsided. We have pared down our forecasts of global growth since last October, despite the boost from cheaper oil and stronger US growth."

While the global economy is expected to grow by 3.5 per cent this year, and 3.7 per cent next year, this is still below what could have been expected after such a crisis, she added.