PM Modi defends economy after India loses the mantle of world’s fastest growing economy to China

PM Modi noted that several international financial agencies still ranked India highly on economic parameters, despite the gloomy IMF figures released on Monday.

By: News Desk |
January 17, 2017 1:22 pm

Indian Prime Minister Narendra Modi said on Tuesday India would remain one of the fastest growing economies in the world, a day after the International Monetary Fund (IMF) highlighted that China had overtaken India as the fastest growing major economy in the world in 2016.

In a series of tweets he posted on Tuesday, Modi noted that several international financial agencies still ranked India highly on economic parameters.

The IMF on Monday noted India’s growth in 2016 had fallen to 6.6 percent, blaming the Indian government’s demonetisation drive for the slowdown. It noted China had regained the status of the fastest growing major economy in the world, pushing India to the second place.

According to IMF figures, Indian economy grew at 6.6 percent in 2016 compared to its year-on-year growth of 7.6 percent in 2015. In 2016, China’s growth rate narrowly beat India as the dragon grew at 6.7 percent during the same period.

India will remain one of the fastest growing major economies in 2017: ICRAhttps://t.co/PERjZ3IPAB

via NMApp pic.twitter.com/tnE3T0o6ao

— PMO India (@PMOIndia) January 17, 2017

India to remain one of the fastest growing economies: Moody’shttps://t.co/mJywKonL4P

via NMApp pic.twitter.com/EiD1wU3XL8

— PMO India (@PMOIndia) January 17, 2017

Indian consumers most optimistic in Asia Pacific: Mastercardhttps://t.co/S18GqFgdJx

via NMApp pic.twitter.com/jAyzZlP8AS

— PMO India (@PMOIndia) January 17, 2017

(Source: Twitter/PMO)

The IMF said the decrease in consumer spending in the wake of Indian government’s cash ban decision was the reason it had downgraded India’s 2016 forecast.

However, the US-based financial institution said India would make a come back in 2017 and regain the status of the fastest growing major economy in 2017. It said India would grow at 7.2 percent this year, before further surging to 7.7 percent in 2018. China’s growth, on the other hand, will decelerate to 6.5 percent in 2017 before hitting a recent low of 6 percent in 2018.

Nearly 90 percent of India’s cash in circulation was nixed overnight on Nov 8 last year, in a move the Modi government said was a crackdown on corruption, illegal money laundering, or “black money”, and terrorist financing. However, some weeks into the unprecedented economic exercise, it started to emerge the government had overestimated the magnitude of ‘black money’ in circulation, following which Modi re-branded the whole demonetisation drive as a push to digitise the Indian economy.