: India to contribute 15% of global growth in 2023, says IMF MD #FinanceIndia #StockMarketNEWS #Business Press Trust of India Washington India continues to remain a relative “bright spot”

@StockMarketNEWS Mon 27 Feb, 2023

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India to contribute 15% of global growth in 2023, says IMF MD #FinanceIndia #StockMarketNEWS #Business
Press Trust of India

Washington

India continues to remain a relative “bright spot” in the world economy, and will alone contribute 15% of the global growth in 2023, International Monetary Fund (IMF) managing director Kristalina Georgieva said.

While digitisation pulled out the world’s fifth-largest economy from pandemic lows, prudent fiscal policy and significant financing for capital investments provided in the next year’s budget will help sustain the growth momentum.

“India’s performance has been quite impressive. For this year, we expect India to retain a high growth rate, 6. 8% for the year that ends in March. For FY 2023/24 (April 2023 to March 2024) we project 6. 1%, a bit of slow down like the rest of the world economy, but way above the global average. And in that way, India is providing about 15% of global growth in 2023,” Georgieva said. That is the fastest growth rate among major economies.

India remains a bright spot at a time when the IMF is projecting 2023 to be difficult with global growth slowing down from 3. 4% last year to 2. 9% in 2023, she observed.

“Why is India a bright spot? Because one, the country has done really well to turn the digitalization that has been already moving quite well into a major driver of overcoming the impact of the pandemic and creating opportunities for growth and jobs,” the Managing Director noted.

“Second, because India’s fiscal policy has been responsive to economic conditions. We have seen the new budget presented, and it signals the commitment to fiscal consolidation, while at the same time provides significant financing for capital investments. And three, because India didn’t shy away to learn the lessons from the pandemic and to implement very strong policies to overcome what has been really a difficult time for a number of months,” she said.

Responding to a question, Georgieva said she is impressed by two things in the latest annual budget presented by Union Finance Minister Nirmala Sitaraman. “Overall, a very, very thoughtful work done by the Minister of Finance. ”

“The first one is how much care is placed on balancing development needs with fiscal responsibility in India. So, you have a budget, that is realistic on the revenue side with a focus on growth-supporting spending. And secondly, the investment in capital expenditures, that is there to provide the long-term foundation for growth,” she said.

Sitharaman in the budget for FY24 announced one of the biggest-ever increases in capital spending to create jobs but shunned outright populism in the last full budget ahead of the general election due in 2024.