IMF: 15% of global growth in 2023 will be from India

WASHINGTON: India continues to remain a relative “bright spot” in the world economy, and will alone contribute 15 per cent 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 the 2023-24 fiscal we project 6.1%, a bit of a slowdown like the rest of the world, but way above global average,” she 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 per cent last year to 2.9 per cent 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,” she noted.

“Second, because India’s fiscal policy has been responsive to economic conditions. The new budget signals the commitment to fiscal consolidation, while at the same time providing 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 months,” she said.