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India likely to grow above 6% over next 5 years: International Monetary Fund – Times of India

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NEW DELHI: The International Monetary Fund (IMF) has said that India is expected to grow above 6% over the next five years, driven by continued strong investment, still-growing private consumption, and digitalisation-driven productivity gains despite widespread global uncertainty.
The IMF, in its article IV consultation report, said a robust public capex agenda, which will support India’s wide-ranging infrastructure needs, is expected to boost growth while crowding-in private investment and growth is expected at 6.3% in both FY24 and FY25.
The IMF has commended the Indian authorities for their macroeconomic policies and reforms that resulted in the economy’s strong performance, resilience, and financial stability. It said India is on track to be one of the fastest-growing major economies in the world this year. Nonetheless, the economy is facing global headwinds, including a global growth slowdown in an increasingly fragmented world, said the multilateral agency.

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“Noting that India is one of the fastest-growing economies globally, directors called for continued appropriate policies to sustain economic stability and for further progress in key structural reforms to unleash India’s significant potential,” according to the report. Under Article IV of the IMF’s articles of agreement, the IMF holds bilateral discussions with members, usually every year, which serves as a health check for the respective economies.
The report also praised RBI’s “proactive monetary policy actions” and strong commitment to price stability. The current neutral monetary policy stance, anchored on a data dependent approach, is appropriate and should gradually bring inflation back to the target, according to the report.
India has emerged as the fastest growing major economy and several multilateral agencies, economists and brokerages have raised India’s economic growth projection, citing robust domestic demand. RBI has raised its projection to 7% for the current fiscal year from 6.5%.
“India’s economy showed robust growth over the past year. Headline inflation has, on average, moderated although it remains volatile. Employment has surpassed the pre-pandemic level and, while the informal sector continues to dominate, formalisation has progressed. The financial sector has been resilient – strongest in several years – and largely unaffected by global financial stress in early 2023,” according to the IMF report.



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