India: Selected Issues

February 20, 2014

Preview Citation

Format: Chicago

India: Selected Issues, (USA: International Monetary Fund, 2014) accessed October 6, 2024

Summary

This Selected Issues paper uncovers the factors behind the unprecedented widening of India’s current account deficit in terms of the sectoral savings-investment balance. The unprecedented widening of India’s current account deficit in recent years is a symptom of underlying macroeconomic imbalances and structural weaknesses. Persistently high inflation has depressed real returns, prompting a surge in gold imports and a marked deterioration in household financial savings and the savings-investment balance. In turn, improvement in the public sector’s savings-investment balance was achieved through capital spending cuts, as subsidies remained high and fuel price adjustments lagged. Further efforts to increase financial savings would help reduce the current account deficit sustainably and boost growth.

Subject: Commodity markets, Economic growth, Financial markets, Inclusive growth, Inflation, Oil prices, Poverty, Poverty reduction, Prices

Keywords: Commodity markets, CR, Food-price inflation shock, Global, IMF staff calculation, Inclusive growth, India, Inflation, Investment, Investment slump, ISCR, Labor market rigidity, Oil prices, Poverty reduction, Product market, Product market rigidity, South Asia

Publication Details

Pages:

45
Volume:

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DOI:

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Issue:

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Series:

Country Report No. 2014/058
Stock No:

1INDEA2014002
ISBN:

9781484309001
ISSN:

1934-7685

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