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Updated December 20th, 2023 at 10:25 IST

IMF forecasts 6.3% growth for India's economy in current fiscal year

The IMF's growth forecast of 6.3 per cent is slightly lower than the 7 per cent prediction by the Reserve Bank of India (RBI).

Reported by: Business Desk
Economy
Economy | Image:Unsplash
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In its latest assessment, the International Monetary Fund (IMF) has projected a growth rate of 6.3 per cent for India's economy in the current fiscal year, ending March 31, 2024, and the subsequent fiscal year. The IMF's outlook, shared in its Article IV consultation report, highlights the role of macroeconomic stability and India's robust digital and government infrastructure programs in supporting this growth.

The IMF's growth forecast of 6.3 per cent is slightly lower than the 7 per cent prediction by the Reserve Bank of India (RBI). The IMF acknowledges the influence of India's digital public infrastructure and the government's strong infrastructure initiatives as key factors sustaining economic growth.

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The report underscores the importance of macroeconomic stability in supporting India's economic resilience. The country's ability to maintain stability contributes to its growth outlook, according to the IMF.

India's digital public infrastructure is identified as a key driver of economic growth. The report suggests that leveraging digital platforms can enhance efficiency and contribute to overall economic development.

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The IMF highlights the significance of India's government-led infrastructure program in sustaining economic momentum. Strong government initiatives are expected to play a pivotal role in supporting key sectors and fostering overall growth.

The IMF notes that India possesses the potential for even higher growth, emphasizing the need for comprehensive reforms. The report suggests that unleashing the full potential of labour and human capital through reforms could contribute to greater economic expansion.

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The IMF anticipates that headline inflation will gradually decline to the target. However, it acknowledges the volatility in inflation due to food price shocks. In November, retail inflation rose to 5.55 per cent, within the RBI's tolerance band of 2 per cent-6 per cent but exceeding the target of 4 per cent.

The IMF's report encourages the implementation of comprehensive reforms to unlock higher growth potential. It recognizes the importance of addressing structural issues and fostering an environment conducive to sustained economic development.

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(With Reuters inputs)
 

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Published December 19th, 2023 at 08:42 IST

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