GUWAHATI: The International Monetary Fund (IMF) has lauded India's economic resilience and growth in the face of global challenges, as per an official IMF report on December 18.
In its annual Article IV consultation report, the IMF highlighted that India has emerged as a star performer and is anticipated to contribute over 16 percent of global growth. The report commended India's prudent macroeconomic policies, positioning it as one of the fastest-growing major economies globally this year.
According to the report, the Indian government has demonstrated a robust commitment to investing in infrastructure and developing necessary logistics, laying a solid foundation for sustained growth. The IMF acknowledged several structural reforms undertaken by the government, with digitalisation being a flagship initiative, setting the stage for increased productivity and future growth. The report projected India's economy to grow at 6.3% during the current fiscal year.
While recognising India's potential for even higher growth, particularly with increased contributions from labor and human capital, the IMF emphasised the importance of comprehensive reforms. It recommended policy priorities such as replenishing fiscal buffers, ensuring price stability, maintaining financial stability, and fostering inclusive growth through structural reforms.
The IMF also commended the Reserve Bank of India's (RBI) proactive monetary policy actions and its steadfast commitment to price stability. The report supported the current neutral monetary policy stance, rooted in a data-dependent approach, deeming it appropriate to gradually bring inflation back to the target.
The RBI's Monetary Policy Committee's decision to raise the policy repo rate by 250 basis points in 2022-23, reaching 6.5 per cent, was acknowledged as a response to address elevated inflation levels amid a surge in global commodity prices.
The official report has been linked below.