IMF Staff Country Reports

The 2023 Article IV Consultation highlights that India is on track to be one of the fastest growing major economies in the world this year, underpinned by prudent macroeconomic policies. Nonetheless, the economy is facing global headwinds, including a global growth slowdown in an increasingly fragmented world. Policy priorities should focus on replenishing fiscal buffers, securing price stability, maintaining financial stability, and accelerating inclusive growth through comprehensive structural reforms while preserving debt sustainability. Elevated public debt calls for ambitious medium-term consolidation, while continuing to prioritize capital spending. This should be complemented with a sound medium-term fiscal framework to promote transparency and accountability and align policies with India’s development goals. In order to reap the benefits of demographic tailwinds, structural policy should focus on promoting high quality job-rich growth, underpinned by comprehensive reform in areas of education, health, land, agriculture, and labor markets, including measures to boost female labor force participation. Continuing investment in infrastructure, strengthening governance, and enhancing a sound business environment are critical.