New Delhi: India’s economy has shown resilience amid global economic uncertainty and the energy price shock, with real GDP growth reaching 7.8% in the second quarter, the International Monetary Fund (IMF) has said.
Responding to questions on India’s economic performance, IMF Communications Department Director Julie Kozack said the 7.8% real GDP growth recorded in the second quarter was higher than both IMF staff expectations and the consensus among other observers.
She said stronger-than-expected performance was driven by robust activity in the services sector and exports.
According to Kozack, the latest growth figures underline the resilience of the Indian economy despite the energy price shock. She also reiterated that India remains a key growth engine for the global economy.
The IMF official was also asked about concerns surrounding the reporting of GDP figures in India and the integrity and transparency of the country’s GDP data.
Kozack said the latest GDP release for the second quarter incorporated a new index of industrial production and a new producer price index series.
She said these two new statistical series should help improve India’s GDP estimates. The IMF welcomed the steps being taken by India to modernise its macroeconomic statistics and encouraged the authorities to continue strengthening the statistical framework and data quality.
The discussion also focused on the impact of rising crude oil prices on India, particularly as Brent crude approached USD 100 a barrel amid the West Asia crisis.
Kozack said higher energy or oil prices can put pressure on the balance of payments of oil-importing countries and can also affect their fiscal positions, depending on the composition of government finances.
She noted that many oil-importing countries have taken measures to mitigate the impact of the energy price shock.
In India’s case, she said the shock had occurred at a time when the country was in a stronger economic position, which had contributed to its resilience.
The IMF is monitoring the impact of higher oil prices on the Indian economy. Kozack said the organisation was in the process of preparing new forecasts for India, which will be announced at the time of the October World Economic Outlook.
She added that, so far, India had demonstrated considerable resilience to the energy price shock.
