India pips major world economies as IMF projects 8.5% growth in GDP for 2022

The International Monetary Fund (IMF) has projected India to be the world's fastest-growing economy in 2022. According to the World Economic Outlook, India is expected to grow by 9.5% in 2021 and 8.5% in 2022, thus retaining its GDP growth rate irrespective of other major world economies.

Unveiling the latest data on Tuesday, the IMF said that New Delhi's financial plan predictions were constant with accomplishing the Reserve Bank of India's (RBI) inflation target. India's central bank and regulatory body under the jurisdiction of the Ministry of Finance has also maintained its GDP growth target for this year at 9.5%. 

According to the WEO update released ahead of the annual meeting of the IMF and the World Bank, the world is expected to grow at 5.9% in 2021 and 4.9% in 2022. The projections put India ahead of global powers. The United States is projected to grow at 6% this year and 5.2% the next year. China, on the other hand, is projected to grow at 8% in 2021 and 5.6% in 2022.

What helped India become the fastest-growing economy?

India is doing well in terms of vaccinating its people which is certainly helpful in its economy, Chief Economist of the IMF Gita Gopinath said.

"We didn't have a change our growth forecast for this year for India. I mean India came out of a very, very tough second wave and that led to a big downgrade in July but we have no change (in its growth rate projections) as of now,” she told reporters during a virtual conference call on Tuesday.

India’s growth projection released by the latest World Economic Outlook remains unchanged from its July update but is a three-percentage point in 2021 and a 1.6% point drop from its April projections.

Gopinath said the Indian economy has already faced many challenges with regard to the financial market, even as the pandemic continues to linger. "The Indians are doing well in terms of vaccination rates and that's certainly helpful," the top IMF official said in response to a question.

Notably, in July 2021, the organization of 190 countries, working to foster global monetary cooperation, had cut India's growth projection by 300 basis points to 9.5% for the current financial year.

The total COVID-19 vaccine doses administered in the country crossed 95.82 crores on Monday as 59 lakh more jabs were given during the day, the Union Health Ministry said. The countrywide vaccination drive was rolled out on January 16 with healthcare workers (HCWs) getting inoculated in the first phase. The vaccination of frontline workers (FLWs) started on February 2.