India’s chief economic advisor hits back at IMF downgrade, says it’s ‘significantly off the mark’

3rd Aug, 2021

India’s chief economic advisor hits back at IMF downgrade, says it’s ‘significantly off the mark’

Krishnamurthy Subramanian, India's senior economic advisor, slammed the International Monetary Fund for lowering the country's growth forecast, calling it "far off the mark." Last week, the International Monetary Fund lowered India's GDP projection to 9.5 percent for the fiscal year ending in March 2022, down from 12.5 percent in April. The IMF lowered India's prospects in an accompanying report, citing a severe second wave of Covid-19 outbreak and a "anticipated sluggish recovery in confidence from that setback." Subramanian stated on Monday on CNBC's "Street Signs Asia" that the IMF's evaluation was influenced by "saliency bias," in which stunning data is given greater attention while data that is comparably less spectacular is overlooked. He stated that India opposes the downgrading. “Our predictions were not as high as theirs, and we do not believe the change is justified,” Subramanian said of the 3 percent cut. “I would argue the IMF is well off the mark.” He said that the Indian government's forecasts are more in line with the Reserve Bank of India's projections, which were cut down by 1% to 9.5 percent in June. To be precise, both the RBI and the IMF now forecast 10.5 percent growth for India, although the fund earlier forecasted 12.5 percent growth vs 10.5 percent for the central bank.