India can gain by easing limits on trade and investment: IMF

 The Dollar Business Bureau Emerging market and developing economies have an important structural reform agenda. These economies can reap productivity gains by easing limits on trade and investment, removing infrastructure bottlenecks (India, South Africa), and improving business conditions (Indonesia and Russia). In other countries (Brazil, India, and South Africa), reforms to education, labour, and product markets can help raise labour force participation and productivity. Finally, lower oil prices offer an opportunity to decrease energy subsidies and replace them with better-targeted programs, as well as reform energy taxation (including in advanced economies), said the International Monetary Fund (IMF)’s latest World Economic Outlook report. The report also indicated that India will overtake China as the fastest growing emerging economy in 2015-16 by clocking a growth rate of 7.5% on back of recent policy initiatives, pick-up in investments and lower oil prices. While India's growth rate is expected to improve from 7.2% in last fiscal to 7.5% this year and next fiscal, China will witness a deceleration with growth rate sliding from 7.4% in 2014 to 6.8% in 2015 and 6.3% a year after. Global growth prospects are uneven across major economies, said the report, adding that in advanced economies, growth is projected to strengthen in 2015 relative to 2014, but in emerging market and developing economies it is expected to be weaker. The three key observations of the report were - Global growth forecast unchanged at 3.5% this year and 3.8% in 2016; Divergent growth: stronger in advanced economies, lower in emerging economies and Macro risks decreased, but financial and geopolitical risks increased.    

This article was published on April 14, 2015.