By Our Financial Correspondent
Mumbai, Oct 23 (IVC) India’s contribution to global economic growth would rise by two per cent points in five years as the Indian economy is projected to grow faster in the coming years, a senior International Monetary Fund (IMF) official said here on October 17.
“Currently China and India’s contribution to global growth is 50 per cent, said Krishna Srinivasan, Director, IMF, Asia and Pacific Department . “Out of this India’s contribution is 16 per cent and the rest by China. This 16 per cent contribution from India will grow to 18 per cent in the next five years”, Srinivasan said.
Observing that the Asia Pacific region remained a relatively bright spot despite a challenging global environment, he added that the region’s economy was expected to grow by 4.6 per cent in 2023 and by 4.6 in 2024, putting it on track to contribute about two-thirds to global growth.
“Growth in India remains strong” he said. ”We are projecting growth for the Financial Year 2023-24 at 6.3 per cent supported by strong government expenditure wit some crowding in for private sector investment, along with continued consumption growth and despite weakening external demand”, he asserted.
Stating that India’s retail inflation was moderating he said, “after sharp increase in price in tomatoes and other vegetables in the summer, headline inflation has resumed its downward trend and has returned within the RBI’s tolerance band”, he added.
Srinivasan said India’s government was likely to meet its 5.9 per cent fiscal deficit target in the fiscal 2024. Revenue is expected to reach budgeted levels. There is some pressure on expenditure , with higher-than-budgeted expenditure expected in some areas (such as additional LPG subsidy for the poor, higher MNREGA expenses)”, Srinivasan added.
“At this stage we see room in the budget to absorb these unexpected increases. State governments’ deficit is expected to be 2.8 per cent of GSDP, below the deficit target of 3 per cent in line with past budget execution”, he said. The IMF has asked countries to retain a sufficiently restrictive monetary stance until inflation is firmly on track, Srinivasan added.