A senior IMF official said that inflation in India has increased due to the rise in oil prices due to the Ukraine-Russia war. He said that monetary tightening is necessary to rectify this situation. Apart from this, he also emphasized on improving the growth potential by removing structural weaknesses. Anne-Marie Gulde-Wulf, acting director of the IMF’s Asia and Pacific Division, said the country’s economy could grow at 8.2 percent in 2022-23, a 0.8 percentage point lower than the projections.
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He told a press conference here that the growth is still strong, but there is a substantial decline. Policy makers around the world are taking measures to control inflation. “The main reason for the rise in inflation is the ongoing war in Ukraine. India is particularly dependent on imports of oil and other commodities.
Responding to a question, the IMF official said that in the short term, the policy to help vulnerable households and focus on infrastructure investments is appropriate. He recommended monetary tightening and addressing structural weaknesses.