India overcame budgetary obstacles to record a strong growth rate: a representative of the International Monetary Fund

According to an official of the official of the International Monetary Fund of India of Indian descent, India has become one of the world’s main economies with the quickest rate of growth in recent years by effectively navigating many shocks.

IMF Executive Director Krishna Srinivasan, however, backed the present government’s growth-promoting public investment plan, stating that it hasn’t stifled private investment even if it is “on the weaker side.”

“We also see an increase in consumption at this time of declining inflation.We anticipate it to decline considerably more,” he said.

The IMF openly refuted Subramanian’s claim that the Indian economy could expand at an annual rate of 8% for the next twenty years, late last month. “The views conveyed by Subramanian were in his role as India’s representative at the IMF,” IMF spokesman Julie Kozack said after PM Modi’s former chief economic adviser, Krishnamurthy Subramanian’s remarks gained attention.

During a Thursday briefing hosted by the IMF’s Asia Pacific Department, when asked about the negative risks, Srinivasan said that, in the near future, unpredictable global commodity prices might have a major impact on India’s prospects, particularly if oil prices spike. Shocks to food prices may also affect future economic prospects. He also brought up trade frictions, hazards from geoeconomic fragmentation, and weather-related shocks beyond the near future.

He said, “You need the right kind of skills… you’re going to face competition from the AI and so on,” when asked about India’s demographic dividend. He emphasized that India needs to spend “big time” in both health and education. Therefore, this workforce has to be well prepared to handle that issue.

The International Monetary Fund, however, predicted that West Asian countries will expand more slowly this year than they had previously anticipated due to the conflict in Gaza, assaults on ships in the Red Sea, and decreased oil production, which compound the problems of high debt and high borrowing rates. In its October regional outlook, the IMF reduced its growth estimate for West Asia and North Africa to 2.7% in 2024 from 3.4%.