{
  "title": "IMF Executive Board Concludes 2024 Article IV Consultation with India",
  "publication": "IMF News, February 27, 2025",
  "sourceUrl": "https://www.imf.org/en/news/articles/2025/02/26/pr25045-india-imf-executive-board-concludes-2024-article-iv-consultation-with-india",
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  "summary": "The Executive Board of the International Monetary Fund (IMF) concluded the Article IV consultation with India.",
  "publishDate": "2025-02-27",
  "sections": [
    {
      "heading": "Recent performance and macroeconomic stance",
      "content": "- GDP growth of 6 percent y/y in the first half of 2024/25.\n- Inflation has broadly declined within the tolerance band, with food price fluctuations creating some volatility.\n- Financial sector resilient; non-performing loans at multi-year lows.\n- Fiscal consolidation has continued.\n- Current account deficit has remained well contained, supported by strong growth in service exports."
    },
    {
      "heading": "Outlook and projections",
      "content": "- Real GDP is expected to grow at 6.5 percent in 2024/25 and 2025/26.\n- Headline inflation is expected to converge to target as food price shocks wane.\n- Current account is expected to widen somewhat but remain moderate at -1.3 percent of GDP in 2025/26.\n- India’s financial sector health, strengthened corporate balance sheets, and digital public infrastructure support potential for sustained medium-term growth and continued social welfare gains."
    },
    {
      "heading": "Risks",
      "content": "- Downside risks predominate:\n  - Deepening geoeconomic fragmentation could affect external demand.\n  - Deepening regional conflicts could result in oil price volatility, weighing on India’s fiscal position.\n  - Domestic risk that private consumption and investment recovery may be weaker if real incomes do not recover sufficiently.\n  - Weather shocks could adversely impact agricultural output, lifting food prices and weighing on rural consumption recovery.\n- Upside:\n  - Deeper implementation of structural reforms could boost private investment and employment, raising potential growth."
    },
    {
      "heading": "Executive Board assessment and recommendations",
      "content": "- Directors commended prudent macroeconomic policies and reforms that contributed to resilience and made India once again the fastest growing major economy.\n- Continued appropriate policies are essential given headwinds from geoeconomic fragmentation and slower domestic demand.\n- Fiscal policy:\n  - Commended adoption of a debt target as the medium-term fiscal anchor.\n  - Recommended continued, well-calibrated fiscal consolidation over the medium term to rebuild buffers, ease debt service, and reduce debt.\n  - Suggested greater focus on domestic revenue mobilization and current expenditure rationalization (such as better targeting of subsidies) to create space for growth-enhancing expenditure on infrastructure and health.\n  - Noted fiscal disparities across states and broadly agreed that a more holistic fiscal framework (including state and central government) and a more detailed fiscal deficit path with sufficient flexibility could be used as an operational guide.\n- Monetary and exchange rate policy:\n  - Welcomed the Reserve Bank of India’s well-calibrated monetary policy with inflation remaining within the target band.\n  - Noted opportunities could arise to gradually lower the policy rate further; monetary policy should remain data-dependent and well communicated.\n  - Recommended greater exchange rate flexibility as the first line of defense in absorbing external shocks, with foreign exchange interventions limited to addressing disorderly market conditions; a few Directors saw the need for interventions in other cases given limits in the global financial safety net.\n- Financial sector:\n  - Welcomed the 2024 Financial System Stability Assessment and encouraged using the favorable environment to further strengthen financial resilience.\n  - Noted pockets of vulnerability from interconnectedness among nonbank financial institutions, banks, and markets, and concentrated exposures to the power and infrastructure sectors.\n  - Recommended further aligning financial sector regulation, supervision, resolution, and safety net with international standards.\n  - A number of Directors suggested greater flexibility in priority sector lending.\n  - Encouraged further improvement of the AML/CFT framework.\n- Structural reforms:\n  - Emphasized comprehensive structural reforms to create high-quality jobs, invigorate investment, and raise potential growth.\n  - Priorities include implementing labor market reforms, strengthening human capital, and supporting greater participation of women in the labor force.\n  - Boosting private investment and FDI requires stable policy frameworks, greater ease of doing business, governance reforms, and increased trade integration (including tariff and nontariff reduction measures).\n  - Welcomed recent tariff reductions as potentially enhancing competitiveness and fostering India’s role in global value chains.\n  - Commended progress in emission intensity reduction and renewable energy deployment; a balanced climate policy framework and greater access to concessional financing and technology would be key to achieving net zero emissions by 2070.\n  - Welcomed ongoing capacity development to upgrade the quality, availability, and timeliness of macroeconomic and financial statistics."
    },
    {
      "heading": "Key social and economic indicators (selected, 2020/21–2025/26)",
      "content": "- Real GDP (at market prices), Growth (in percent):\n  - 2020/21: -5.8\n  - 2021/22: 9.7\n  - 2022/23: 7.0\n  - 2023/24: 8.2\n  - 2024/25 (Est.): 6.5\n  - 2025/26 (Projections): 6.5\n- Consumer prices - Combined (percent change, period average):\n  - 2020/21: 6.2\n  - 2021/22: 5.5\n  - 2022/23: 6.7\n  - 2023/24: 5.4\n  - 2024/25: 4.8\n  - 2025/26: 4.3\n- Gross saving (percent of GDP):\n  - 2020/21: 29.8\n  - 2021/22: 30.9\n  - 2022/23: 31.0\n  - 2023/24: 32.6\n  - 2024/25: 32.7\n  - 2025/26: 32.2\n- Gross investment (percent of GDP):\n  - 2020/21: 28.9\n  - 2021/22: 32.1\n  - 2022/23: 33.0\n  - 2023/24: 33.3\n  - 2024/25: 33.6\n  - 2025/26: 33.5\n- Central government overall balance (percent of GDP):\n  - 2020/21: -8.5\n  - 2021/22: -6.7\n  - 2022/23: -6.6\n  - 2023/24: -5.6\n  - 2024/25: -4.8\n  - 2025/26: -4.5\n- General government overall balance (percent of GDP):\n  - 2020/21: -12.9\n  - 2021/22: -9.4\n  - 2022/23: -9.0\n  - 2023/24: -8.1\n  - 2024/25: -7.4\n  - 2025/26: -7.0\n- General government debt (percent of GDP):\n  - 2020/21: 88.4\n  - 2021/22: 83.5\n  - 2022/23: 82.0\n  - 2023/24: 82.7\n  - 2024/25: 81.4\n- Cyclically adjusted balance (% of potential GDP):\n  - 2020/21: -7.6\n  - 2021/22: -7.7\n  - 2022/23: -8.4\n  - 2023/24: -8.2\n  - 2024/25: -7.1\n- Cyclically adjusted primary balance (% of potential GDP):\n  - 2020/21: -2.5\n  - 2021/22: -2.6\n  - 2022/23: -3.3\n  - 2023/24: -2.8\n  - 2024/25: -2.0\n  - 2025/26: -1.6\n- Broad money (y/y percent change, end-period):\n  - 2020/21: 12.2\n  - 2021/22: 8.8\n  - 2022/23: 9.0\n  - 2023/24: 11.1\n  - 2024/25: 10.0\n  - 2025/26: 10.9\n- Domestic Credit (y/y percent change, end-period):\n  - 2020/21: 9.5\n  - 2021/22: 13.1\n  - 2022/23: 12.0\n  - 2023/24: 11.2\n  - 2024/25: 11.9\n- 91-day treasury bill yield (end-period):\n  - 2020/21: 3.3\n  - 2021/22: 3.8\n  - 2022/23: …\n- 10-year government bond yield (end-period):\n  - 2020/21: 6.3\n  - 2021/22: 6.9\n  - 2022/23: 7.3\n  - 2023/24: 7.1\n- Stock market (y/y percent change, end-period):\n  - 2020/21: 68.0\n  - 2021/22: 18.3\n  - 2022/23: 0.7\n  - 2023/24: 24.9\n- Merchandise exports (in billions of U.S. dollars):\n  - 2020/21: 296.3\n  - 2021/22: 429.2\n  - 2022/23: 456.1\n  - 2023/24: 441.4\n  - 2024/25: 443.3\n  - 2025/26: 458.7\n- Merchandise imports (in billions of U.S. dollars):\n  - 2020/21: 398.5\n  - 2021/22: 618.6\n  - 2022/23: 721.4\n  - 2023/24: 686.3\n  - 2024/25: 728.8\n  - 2025/26: 768.6\n- Terms of trade (G&S, annual percent change):\n  - 2020/21: 2.0\n  - 2021/22: -8.7\n  - 2022/23: -2.7\n  - 2023/24: 3.2\n  - 2024/25: -1.3\n  - 2025/26: 0.2\n- Current account balance (in billions of U.S. dollars):\n  - 2020/21: 24.0\n  - 2021/22: -38.7\n  - 2022/23: -67.0\n  - 2023/24: -26.0\n  - 2024/25: -34.7\n  - 2025/26: -53.8\n- Current account balance (In percent of GDP):\n  - 2020/21: 0.9\n  - 2021/22: -1.2\n  - 2022/23: -0.7\n  - 2023/24: -0.9\n- Foreign direct investment, net (\"-\" signifies inflow) (in billions of U.S. dollars):\n  - 2020/21: -44.0\n  - 2021/22: -38.6\n  - 2022/23: -28.0\n  - 2023/24: -10.1\n  - 2024/25: 1.9\n  - 2025/26: -6.4\n- Portfolio investment, net (equity and debt, \"-\" = inflow) (in billions of U.S. dollars):\n  - 2020/21: -36.1\n  - 2021/22: 16.8\n  - 2022/23: 5.2\n  - 2023/24: -44.1\n  - 2024/25: -4.6\n  - 2025/26: -20.4\n- Overall balance (\"+\" signifies balance of payments surplus) (in billions of U.S. dollars):\n  - 2020/21: 87.3\n  - 2021/22: 47.5\n  - 2022/23: -9.1\n  - 2023/24: 63.7\n  - 2024/25: 2.8\n  - 2025/26: 25.0\n- Gross reserves (in billions of U.S. dollars, end-period):\n  - 2020/21: 577.0\n  - 2021/22: 607.3\n  - 2022/23: 578.4\n  - 2023/24: 646.4\n  - 2024/25: 649.2\n  - 2025/26: 674.2\n- Gross reserves (In months of next year's imports (goods and services)):\n  - 2020/21: 8.1\n  - 2021/22: 8.0\n  - 2022/23: 8.3\n  - 2023/24: 7.9\n  - 2024/25: 7.8\n- External debt (in billions of U.S. dollars, end-period):\n  - 2020/21: 573.7\n  - 2021/22: 619.1\n  - 2022/23: 624.1\n  - 2023/24: 668.9\n  - 2024/25: 726.5\n  - 2025/26: 787.3\n- External debt (percent of GDP, end-period):\n  - 2020/21: 21.4\n  - 2021/22: 19.5\n  - 2022/23: 18.6\n  - 2023/24: 18.7\n  - 2024/25: 18.9\n- Of which: Short-term debt:\n  - 2020/21: 8.5\n- Ratio of gross reserves to short-term debt (end-period):\n  - 2020/21: 2.3\n  - 2021/22: 2.1\n  - 2022/23: 2.2\n- Real effective exchange rate (annual avg. percent change):\n  - 2020/21: -0.8\n  - 2021/22: 0.3\n  - 2022/23: -0.3\n- Memorandum item (in percent of GDP) — Fiscal balance under authorities' definition:\n  - 2020/21: -9.2\n  - 2021/22: -6.5\n  - 2022/23: -4.4\n\nIMF Communications Department. February 27, 2025.\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/2025/02/26/pr25045-india-imf-executive-board-concludes-2024-article-iv-consultation-with-india"
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    "Published: February 27, 2025",
    "GDP growth of 6 percent y/y in the first half of 2024/25.",
    "Inflation has broadly declined within the tolerance band, with food price fluctuations creating some volatility.",
    "Financial sector resilient; non-performing loans at multi-year lows.",
    "Fiscal consolidation has continued.",
    "Current account deficit has remained well contained, supported by strong growth in service exports.",
    "Real GDP is expected to grow at 6.5 percent in 2024/25 and 2025/26.",
    "Headline inflation is expected to converge to target as food price shocks wane.",
    "Current account is expected to widen somewhat but remain moderate at -1.3 percent of GDP in 2025/26.",
    "India’s financial sector health, strengthened corporate balance sheets, and digital public infrastructure support potential for sustained medium-term growth and continued social welfare gains.",
    "Downside risks predominate:",
    "Upside:",
    "Directors commended prudent macroeconomic policies and reforms that contributed to resilience and made India once again the fastest growing major economy.",
    "Continued appropriate policies are essential given headwinds from geoeconomic fragmentation and slower domestic demand.",
    "Fiscal policy:",
    "Monetary and exchange rate policy:",
    "Financial sector:",
    "Structural reforms:",
    "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):",
    "Cyclically adjusted balance (% of potential GDP):",
    "Cyclically adjusted primary balance (% of potential GDP):",
    "Broad money (y/y percent change, end-period):",
    "Domestic Credit (y/y percent change, end-period):",
    "91-day treasury bill yield (end-period):",
    "10-year government bond yield (end-period):",
    "Stock market (y/y percent change, end-period):",
    "Merchandise exports (in billions of U.S. dollars):",
    "Merchandise imports (in billions of U.S. dollars):",
    "Terms of trade (G&S, annual percent change):",
    "Current account balance (in billions of U.S. dollars):",
    "Current account balance (In percent of GDP):",
    "Foreign direct investment, net (\"-\" signifies inflow) (in billions of U.S. dollars):",
    "Portfolio investment, net (equity and debt, \"-\" = inflow) (in billions of U.S. dollars):",
    "Overall balance (\"+\" signifies balance of payments surplus) (in billions of U.S. dollars):",
    "Gross reserves (in billions of U.S. dollars, end-period):",
    "Gross reserves (In months of next year's imports (goods and services)):",
    "External debt (in billions of U.S. dollars, end-period):",
    "External debt (percent of GDP, end-period):",
    "Of which: Short-term debt:",
    "Ratio of gross reserves to short-term debt (end-period):",
    "Real effective exchange rate (annual avg. percent change):",
    "Memorandum item (in percent of GDP) — Fiscal balance under authorities' definition:",
    "[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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