{
  "title": "IMF Executive Board Concludes 2022 Article IV Consultation with India",
  "publication": "IMF News, December 23, 2022",
  "sourceUrl": "https://www.imf.org/en/news/articles/2022/12/19/pr22444-india-imf-executive-board-concludes-2022-article-iv-consultation",
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  "summary": "IMF Executive Board Concludes 2022 Article IV Consultation with India",
  "publishDate": "2022-12-23",
  "sections": [
    {
      "heading": "Economic rebound and near‑term outlook",
      "content": "- Real GDP grew by 8.7 percent in FY2021/22, bringing total output above pre‑pandemic levels.\n- Growth is projected at 6.8 percent in FY2022/23 and 6.1 percent in FY2023/24.\n- New COVID cases have fallen to low levels; free administration of booster shots and broader booster eligibility criteria should help improve vaccine coverage.\n- Monetary policy accommodation has been gradually withdrawn; the main policy rate has been increased by 190 basis points so far in 2022.\n- The current account deficit is expected to increase to 3.5 percent of GDP in FY2022/23 as a result of higher commodity prices and strengthening import demand.\n- Inflation is projected at 6.9 percent in FY2022/2023 and is expected to moderate only gradually over the next year."
    },
    {
      "heading": "Risks to the outlook",
      "content": "- Uncertainty is high, with risks tilted to the downside.\n- External risks:\n  - A sharp global growth slowdown would affect India through trade and financial channels.\n  - Intensifying spillovers from the war in Ukraine can cause disruptions in global food and energy markets.\n  - Significantly slower growth in China and advanced economies, and reduced international cooperation, can disrupt trade and increase financial market volatility.\n- Domestic risks:\n  - Rising inflation can dampen domestic demand and impact vulnerable groups.\n- Upside possibilities:\n  - Successful implementation of wide‑ranging reforms or greater than expected dividends from advances in digitalization could increase India’s medium‑term growth potential."
    },
    {
      "heading": "Executive Board assessment and policy recommendations",
      "content": "- Fiscal policy\n  - Directors concurred authorities appropriately responded to post‑pandemic shocks with fiscal measures to support vulnerable groups.\n  - Directors encouraged a more ambitious and well‑communicated medium‑term fiscal consolidation anchored on stronger revenue mobilization and further improvement in expenditure efficiency.\n  - High‑quality spending on infrastructure, education and health should be protected.\n  - Further improvements in public financial management, fiscal institutions and transparency would support consolidation efforts.\n- Monetary policy and external sector\n  - Directors noted front‑loaded monetary tightening to address elevated inflation and recommended additional tightening be carefully calibrated and clearly communicated to balance inflation objectives and impact on activity.\n  - India’s external position was viewed as broadly in equilibrium; exchange rate should continue to act as a shock absorber with foreign exchange intervention limited to addressing disorderly market conditions.\n  - Directors welcomed plans to introduce a central bank digital currency.\n- Financial sector and macroprudential measures\n  - While corporate and financial sector balance sheets have improved, Directors encouraged additional measures to counter risks from tightening financial conditions.\n  - Banks should be encouraged to build additional capital buffers and recognize problem loans.\n  - Targeted prudential tools could strengthen resilience to rising interest rate risks.\n  - Directors encouraged further progress on financial sector reforms.\n- Structural reforms and inclusion\n  - Directors commended achievements in digitalization; digital public infrastructure facilitated payments, financial inclusion, and rapid deployment of pandemic support.\n  - Additional efforts to narrow the digital divide (access and literacy) would support productivity gains.\n  - Further progress needed on structural reforms: increasing female labor force participation, reducing youth unemployment, and reducing informality.\n  - Strengthening governance and the regulatory framework would foster transparency and public accountability.\n  - Directors welcomed new trade agreements and noted additional tariff reduction could deepen integration in global value chains.\n- Climate agenda\n  - Directors noted important progress in increasing the share of renewables and improving energy efficiency.\n  - Additional efforts would be needed to meet the authorities’ net zero objective."
    },
    {
      "heading": "Key statistics (selected from \"India: Selected Economic and Financial Indicators, 2018/19–2023/24\")",
      "content": "- Real GDP (at market prices), growth (in percent):\n  - 2018/19: 6.5\n  - 2019/20: 3.7\n  - 2020/21: -6.6\n  - 2021/22: 8.7\n  - 2022/23: 6.8 (Projection)\n  - 2023/24: 6.1 (Projection)\n- Consumer prices - Combined (percent change, period average):\n  - 2018/19: 3.4\n  - 2019/20: 4.8\n  - 2020/21: 6.2\n  - 2021/22: 5.5\n  - 2022/23: 6.9 (Projection)\n  - 2023/24: 5.1 (Projection)\n- Gross saving (percent of GDP):\n  - 2018/19: 30.2\n  - 2019/20: 29.4\n  - 2020/21: 28.8\n  - 2021/22: 30.0\n  - 2022/23: 30.1 (Projection)\n- Gross investment (percent of GDP):\n  - 2018/19: 32.3\n  - 2019/20: 27.9\n  - 2020/21: 31.2\n  - 2021/22: 32.8\n  - 2022/23: 33.0 (Projection)\n- Central government overall balance (percent of GDP):\n  - 2018/19: -3.9\n  - 2019/20: -4.8\n  - 2020/21: -8.6\n  - 2021/22: -6.7\n  - 2022/23: -6.5 (Projection)\n  - 2023/24: -6.2 (Projection)\n- General government overall balance (percent of GDP):\n  - 2018/19: -6.4\n  - 2019/20: -7.5\n  - 2020/21: -12.8\n  - 2021/22: -10.0\n  - 2022/23: -9.9 (Projection)\n  - 2023/24: -9.0 (Projection)\n- General government debt (percent of GDP):\n  - 2018/19: 70.4\n  - 2019/20: 75.1\n  - 2020/21: 89.2\n  - 2021/22: 84.2\n  - 2022/23: 83.5 (Projection)\n  - 2023/24: 83.9 (Projection)\n- Broad money (y/y percent change, end-period):\n  - 2018/19: 10.5\n  - 2019/20: 8.9\n  - 2020/21: 12.2\n  - 2021/22: 8.8\n  - 2022/23: 9.0 (Projection)\n- Domestic Credit (y/y percent change, end-period):\n  - 2018/19: 11.8\n  - 2019/20: 8.3\n  - 2020/21: 9.5\n  - 2021/22: 13.6\n  - 2022/23: 11.4 (Projection)\n- Merchandise exports (in billions of U.S. dollars):\n  - 2018/19: 337.2\n  - 2019/20: 320.4\n  - 2020/21: 296.3\n  - 2021/22: 429.2\n  - 2022/23: 450.3 (Projection)\n  - 2023/24: 462.8 (Projection)\n- Merchandise imports (in billions of U.S. dollars):\n  - 2018/19: 517.5\n  - 2019/20: 477.9\n  - 2020/21: 398.5\n  - 2021/22: 618.6\n  - 2022/23: 737.7 (Projection)\n  - 2023/24: 769.6 (Projection)\n- Current account balance (in billions of U.S. dollars / percent of GDP):\n  - 2018/19: -57.2 / -2.1\n  - 2019/20: -24.5 / -0.9\n  - 2020/21: 24.0 / 0.9\n  - 2021/22: -38.7 / -1.2\n  - 2022/23: -118.3 / -3.5 (Projection)\n  - 2023/24: -109.7 / -2.9 (Projection)\n- Gross reserves (in billions of U.S. dollars, end-period):\n  - 2018/19: 412.9\n  - 2019/20: 477.8\n  - 2020/21: 577.0\n  - 2021/22: 607.3\n  - 2022/23: 540.5 (Projection)\n  - 2023/24: 558.3 (Projection)\n- External debt (in billions of U.S. dollars, end-period):\n  - 2018/19: 543.1\n  - 2019/20: 558.4\n  - 2020/21: 573.7\n  - 2021/22: 619.6\n  - 2022/23: 669.1 (Projection)\n  - 2023/24: 742.5 (Projection)\n- Exchange rate (rupee/U.S. dollar, end-period):\n  - 2018/19: 69.2\n  - 2019/20: 75.4\n  - 2020/21: 73.5\n  - 2021/22: 75.8\n\nPress Release No. 22/444, IMF Communications Department, December 23, 2022.\n\n---\n\n\n References\n\n- https://www.imf.org/-/media/images/imf/bios/imfboard.jpg\n- The Executive Board\n- India and the IMF\n- IMF Policy Advice -- A Factsheet\n- Press Releases\n- PRESS CENTER\n- http://www.IMF.org/external/np/sec/misc/qualifiers.htm\n- https://www.imf.org/en/home\n\nSource: https://www.imf.org/en/news/articles/2022/12/19/pr22444-india-imf-executive-board-concludes-2022-article-iv-consultation"
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    "Published: December 23, 2022",
    "Real GDP grew by 8.7 percent in FY2021/22, bringing total output above pre‑pandemic levels.",
    "Growth is projected at 6.8 percent in FY2022/23 and 6.1 percent in FY2023/24.",
    "New COVID cases have fallen to low levels; free administration of booster shots and broader booster eligibility criteria should help improve vaccine coverage.",
    "Monetary policy accommodation has been gradually withdrawn; the main policy rate has been increased by 190 basis points so far in 2022.",
    "The current account deficit is expected to increase to 3.5 percent of GDP in FY2022/23 as a result of higher commodity prices and strengthening import demand.",
    "Inflation is projected at 6.9 percent in FY2022/2023 and is expected to moderate only gradually over the next year.",
    "Uncertainty is high, with risks tilted to the downside.",
    "External risks:",
    "Domestic risks:",
    "Upside possibilities:",
    "Fiscal policy",
    "Monetary policy and external sector",
    "Financial sector and macroprudential measures",
    "Structural reforms and inclusion",
    "Climate agenda",
    "Real GDP (at market prices), growth (in percent):",
    "Consumer prices - Combined (percent change, period average):",
    "Gross saving (percent of GDP):",
    "Gross investment (percent of GDP):",
    "Central government overall balance (percent of GDP):",
    "General government overall balance (percent of GDP):",
    "General government debt (percent of GDP):",
    "Broad money (y/y percent change, end-period):",
    "Domestic Credit (y/y percent change, end-period):",
    "Merchandise exports (in billions of U.S. dollars):",
    "Merchandise imports (in billions of U.S. dollars):",
    "Current account balance (in billions of U.S. dollars / percent of GDP):",
    "Gross reserves (in billions of U.S. dollars, end-period):",
    "External debt (in billions of U.S. dollars, end-period):",
    "Exchange rate (rupee/U.S. dollar, end-period):",
    "[https://www.imf.org/-/media/images/imf/bios/imfboard.jpg](https://www.imf.org/-/media/images/imf/bios/imfboard.jpg)",
    "[The Executive Board](https://www.imf.org/external/np/sec/memdir/eds.aspx)",
    "[India and the IMF](http://www.imf.org/external/country/IND/index.htm)",
    "[IMF Policy Advice -- A Factsheet](https://www.imf.org/en/about/factsheets/imf-surveillance)",
    "[Press Releases](https://www.imf.org/en/news/searchnews)",
    "[PRESS CENTER](http://presscenter.imf.org/)",
    "[http://www.IMF.org/external/np/sec/misc/qualifiers.htm](http://www.imf.org/external/np/sec/misc/qualifiers.htm)",
    "[https://www.imf.org/en/home](https://www.imf.org/en/home)"
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