Indian economy will continue to do well and hold its place as one of the fastest-growing economies in the world, despite the uncertainty and headwinds experienced globally, a top IMF official said on Tuesday. The announcement was made at a time when the IMF revised its growth prediction for India from 6.1 percent to 5.9 percent for the years 2023–2024.
In an interview with the PTI, Anne-Marie Gulde-Wolf, Deputy Director for Asia and Pacific Department, IMF, said, “The Indian economy continues to perform well and remains the fastest growing Asian economy and one of the fastest growing in the world.” She further added that in order to take the results of the most recent data into account, the IMF has lowered its forecast for India’s growth. The statistics were downgraded as a result of a predicted decrease in consumption growth.
While responding to a question, Gulde-Wolf said that we have seen proof of this declaration in the consumption growth in the data for CY2022:Q4, as the large so-called “revenge consumption” earlier in the year. She also suggested that investment was the main force behind growth, as demonstrated by double-digit credit growth, good PMIs, and a large budgeted government spending plan.
In the medium run, infrastructure investment will demonstrate a significant impact. It will continue to be a top focus in policy because of this. In addition, net exports are anticipated to fare well going forward. Particularly, exports of services will fare exceptionally well.
Gulde-Wolf also mentioned that risks are skewed to the downside and are mostly caused by external variables, such as a stronger-than-expected contraction of partner countries’ external demand, tighter financial conditions globally, and stronger-than-expected spillovers from recent volatility in the global financial markets.
India-China: Drivers Of Growth
Gulde-Wolf expressed optimism that China and India will serve as major economic engines in the future and that they will continue to be South Asian growth engines. They have the ability to stimulate the global economy through commerce, investment, and consumption.
According to her, the bordering countries are increasingly becoming the epicenter of technical innovation, promoting achievements on a worldwide scale in industries like information technology, renewable energy, and artificial intelligence.
