The International Monetary Fund (IMF) has said that growing at a robust rate due to economic reforms in key sectors like digitisation and infrastructure, India has emerged as a star performer and is projected to contribute more than 16 per cent of the global growth. The IMF released its annual Article IV consultation with India, according to which the South Asian country, underpinned by prudent macroeconomic policies, is on track to be one of the fastest-growing major economies in the world this year. It also said that the government has done several structural reforms, the flagship one being the digitalisation, which has been building up over many years and has put India on a strong platform for increased productivity and growth in the future.
The IMF in its annual report recommended that policy priorities should focus on replenishing fiscal buffers, securing price stability, maintaining financial stability, and accelerating inclusive growth through comprehensive structural reforms while preserving debt sustainability. India's economy has rebounded strongly from the pandemic to become an important driver of global growth. After surging during FY2022/23, headline inflation has, on average, moderated although it remains volatile. Employment has surpassed the pre-pandemic level and the informal sector continues to dominate while formalisation has progressed.
It further said the financial sector has been resilient, largely unaffected by global financial stress in early 2023. While the budget deficit has eased, public debt remains elevated, and fiscal buffers need to be rebuilt. Globally, India's 2023 G20 presidency has demonstrated the country's important role in advancing multilateral policy priorities. Observing that GDP growth reached 7.2 per cent in fiscal 2022/23, moderating from 9.1 per cent in FY2021/22, the IMF said growth has been supported by robust consumption stemming from pent-up demand of households and strong investment, with historically high levels of public capital expenditure.
