IMF Staff Country Reports

India: Staff Report for 2014 Article IV Consultation

Publication Date:

February 20, 2014

Electronic Access:

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Summary:

This 2014 Article IV consultation highlights an expected slowdown of growth in India, to 4.6 percent this fiscal year, the lowest in a decade, reflecting global developments and domestic supply constraints. Headline consumer price index inflation is expected to remain near double digits for the remainder of the fiscal year. The current account deficit is narrowing, driven by a significant improvement in exports, robust remittance flows, and a rapid decline in gold imports. Nonetheless, India has very little room to adopt countercyclical policies. It is constrained by persistently high inflation and sizable fiscal and external imbalances. High and persistent inflation is a key macroeconomic challenge facing India. Further increases in the policy rate will be necessary to tackle high inflation and inflation expectations.

Series:

Country Report No. 2014/057

Subject:

Balance of payments Banking Commercial banks Current account deficits Financial institutions Government debt management Inflation Prices Public debt Public financial management (PFM)