Context: According to the World Economic Outlook (WEO) report of International Monetary Fund (IMF) India is to grow at 12.5% in 2021, stronger than that of China.

• India’s economy contracted by a record 8% in 2020.

Key highlights of the World Economic Report 2021

• After an estimated contraction of 3.3% in 2020, the global economy is projected to grow at 6% in 2021, moderating to 4.4 per cent in 2022.
• China was the only major economy to have a positive growth rate of 2.3% in 2020 and it is expected to grow by 8.6% in 2021 and 5.6% in 2022.
• The contraction for 2020 is 1.1 percentage points smaller than projected in the October 2020 WEO.
• The projections for 2021 and 2022 are 0.8 percentage point and 0.2 percentage point stronger than in the October 2020 WEO reflecting additional fiscal support in a few large economies and the anticipated vaccine-powered recovery in the second half of the year.

Global growth is expected to moderate to 3.3 per cent over the medium term.

• It reflects projected damage to supply potential and forces that predate the pandemic, including aging-related slower labour force growth in advanced economies and some emerging market economies.
• Right now, the emphasis should be on escaping the health crisis by prioritising health care spending, on vaccinations, treatments, and health care infrastructure.
• Monetary policy should remain accommodative while pro-actively addressing financial stability risks using macroprudential tools.

International Monetary Fund (IMF)

• IMF was created in 1945.
• It fosters global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth, and reduce poverty around the world.

Its fundamental mission is to ensure the stability of the international monetary system through:

• Keeping track of the global economy and the economies of member countries.
• Lending to countries with balance of payments difficulties.
• Giving practical help to members.

IMF resources:

Most resources for IMF loans are provided by member countries, primarily through:

• Quotas: Based on the relative position in the world economy each member country is assigned specific percentage of quota.
• Special Drawing Rights (SDR): The SDR is an international reserve asset, created by the IMF in 1969 to supplement its member countries’ official reserves.
• SDRs are units of account for the IMF, and not a currency per se.
• Gold: IMF is still one of the world’s largest official holders of gold.
• Borrowing Arrangements: While quota subscriptions of member countries are the IMF's main source of financing, the Fund can supplement its quota resources through borrowing if it believes that they might fall short of members' needs.

World Economic Outlook: It is an IMF report that provides analysis and forecasts of economic developments and policies in its member countries.

• The report encapsulates the state of the global economy and highlights risks and uncertainty that could threaten growth.
• The IMF surveys economists and other experts twice a year to publish the WEO report