IMF Applauds India's Fiscal Discipline, Affirms Nation as Global Economic Bright Spot

IMF Applauds India's Fiscal Discipline, Affirms Nation as Global Economic Bright Spot

New Delhi - The International Monetary Fund (IMF) has commended India's maintenance of fiscal discipline, particularly notable in an election year, highlighting the nation's robust economic performance amidst global uncertainties.

Krishna Srinivasan, Director of the Asia and Pacific Department at the IMF, emphasized India's GDP growth of 6.8% as impressive, coupled with a downward trend in inflation. He underscored the importance of fiscal discipline in ensuring sound macro fundamentals, praising India's adherence to this principle despite electoral pressures.

India's resilience against various shocks over recent years has positioned it as one of the fastest-growing major economies globally. Srinivasan projected continued growth at 6.8% for 2024-25, propelled by private consumption and public investment, with inflation currently below 5%. Notably, India's forex reserves surged to a record USD 648.562 billion, as reported by the Reserve Bank of India, demonstrating robust financial strength.

While acknowledging short-term risks such as volatile commodity prices and geopolitical tensions, Srinivasan identified upside potentials in stronger private consumption and increased private investment. He emphasized India's pivotal role as a driver of global growth, contributing nearly 17% to the global GDP growth.

Additionally, Srinivasan highlighted India's digital public infrastructure (DPI) as a transformative force, enhancing productivity, fostering innovation, and promoting financial inclusion. He emphasized the importance of investing in education and healthcare to leverage India's young and expanding workforce, stressing the need for labor market reforms and reducing trade restrictions to attract business investment.

Looking ahead, Srinivasan emphasized the significance of accurate macroeconomic statistics in facilitating well-informed investment decisions for sustained growth. The IMF remains optimistic about India's economic prospects, recognizing its potential as a bright spot amidst global economic challenges.

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