Christine Lagarde’s no pessimist, says Indian economy on ‘very solid track’

International Monetary Fund (IMF) chief Christine Lagarde seems to have taken Prime Minister Narendra Modi’s advice against being pessimistic about the Indian economy to heart.

Surprising economic experts and “pessimists”, who have been carefully tracing the effects of the Goods and Services Tax and demonetisation on India’s growth and the slide in GDP numbers, Lagarde pronounced on Sunday that “the Indian economy is on a ‘very solid track’ in the mid-term”.

She even described demonetisation and GST as “monumental efforts”, asserting that it is hardly surprising that there “is a little bit of a short-term slowdown” as a result. This after the IMF, as well as the World Bank, recently downgraded India for the current and next fiscal. The Indian economy slowed down in the last quarter to 5.7 per cent growth.

“We have slightly downgraded India, but believe that the country is for the medium and long-term on a growth track that is much more solid as a result of the structural reforms that have been conducted in the last couple of years,” Lagarde said, according to a report in the Economic Times.

“We very much hope that the combination of fiscal – because the deficit has been reduced, inflation has been down significantly – and structural reforms will actually deliver the jobs that the Indian population, particularly the young Indian people, expect in the future,” she added.