India has to keep up the vaccination rate for steady growth says Gita Gopinath

By: WE Staff | Thursday, 14 October 2021

International Monetary Fund (IMF) chief economist Gita Gopinath has said that to maintain steady growth India will have to keep up the vaccination rate, adding that public infrastructure investment will propel economic recovery. She also said that inflation and unemployment were key factors which the government will have to closely monitor.

“Manufacturing and services sectors have shown improvement after the crushing second wave of the Coronavirus pandemic subsided but the area of focus would be public infrastructure investment, as it is from there that growth is going to come from,” the IMF chief economist said.

She said India will have to keep an eye on the coal sector, rising oil prices and inflation. She added, “Secondly, India has to vaccinate to counter the pandemic. Keep confidence high, inflation is important as core inflation is high in India and this needs to be looked into.”

She further added, “At the same time, on close observation, it can be noted that while listed companies have recovered, it is the micro, small and medium enterprises that have been hit hard by the pandemic. Looking at the fact that many people have not been able to return to work, employment is still a distance to be travelled.”

“People are still using rural employment insurance money to survive and this is the real indicator of growth. These are uncertain times, the financial sector risk and the infection risk are always there, so attention will have to be paid to such indicators, she said.

She also spoke about reducing the cost of borrowing while keeping the fiscal deficit in check.

She highlighted the fact that by the end of this year, around 75 per cent of countries won’t be able to meet the target of vaccinating 40 per cent of their populations, especially those in Africa.