The country’s digital public infrastructure and the government’s strong infrastructure program will continue to support growth, the IMF said.
The Indian economy is expected to grow at 6.3% in the current and next fiscal years, the International Monetary Fund (IMF) said on Monday, supported by financial and macroeconomic stability.
The IMF said in its Article IV consultation report, which assesses a country’s current and medium-term economic prospects, the country’s digital public infrastructure and the government’s robust infrastructure program. The government will continue to support growth.
“India has even higher growth potential, with greater contributions from labor and human capital, if comprehensive reforms are implemented,” the IMF said.
The IMF’s growth forecast for the current fiscal year, ending March 31, 2024, is lower than the Reserve Bank of India’s (RBI) forecast of 7%. “Overall inflation is expected to gradually ease towards the target level, although it remains volatile due to the food price shock,” the IMF said.
Volatility in food prices pushed retail inflation to 5.55% in November from 4.87% the previous month. Although this figure is within the RBI’s allowable range of 2-6%, it is still higher than the target of 4%.
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