India’s economy picking up and growth prospects look bright, says IMF
This is critical in a country where per capita income is about $2,000 U.S. dollars, still well below that of other large emerging economies.
But to sustain rapid growth and raise incomes for the country’s 1.3 billion people, India will need to build on the success of its reforms, the IMF said in its annual assessment of the Indian economy.
IMF Country Focus interviewed Ranil Salgado, the head of the IMF team for India, to discuss a few of these key recommendations, as well as the report’s overall findings.
India’s economy is gaining momentum, thanks to the implementation of several recent noteworthy policies—such as the enactment of the long-awaited goods and services tax, and the country opening up more to foreign investors. Therefore, we expect economic growth to pick up to about 7.3 percent for fiscal year 2018/19—meaning the year that runs from April of 2018 through March 2019—from 6.7 percent in the year prior. Meanwhile, inflation has edged higher, in part due to a reduction of economic slack.
To sustain and build on these policies and to harness the demographic dividend associated with a growing working-age population (which constitutes about two-thirds of the total population), India needs to reinvigorate reform efforts to keep the growth and jobs engine running. This is critical in a country where per capita income is about $2,000 U.S. dollars, still well below that of other large emerging economies.