Washington, April 17 (IANS) The International Monetary Fund (IMF) on Tuesday said that it expects India’s economy to grow at 7.4 per cent in 2018 from 6.7 per cent in 2017.
According to the IMF’s World Economic Outlook (WEO) report, the country’s economic growth is expected to be 7.8 per cent in 2019.
As per the report, the current year’s economic growth will be pushed higher by “strong private consumption as well as fading transitory effects of the currency exchange initiative and implementation of the national goods and services tax.”
“Over the medium term, growth is expected to gradually rise with continued implementation of structural reforms that raise productivity and incentivise private investment,” the report read.
Further, the IMF’s WEO report pointed out that India has made progress on structural reforms in the recent past, “including through the implementation of the goods and services tax, which will help reduce internal barriers to trade, increase efficiency, and improve tax compliance”.
“While the medium-term growth outlook for India is strong, an important challenge is to enhance inclusiveness,” the report said.
“The main priorities for lifting constraints on job creation and ensuring that the demographic dividend is not wasted are to ease labour market rigidities, reduce infrastructure bottlenecks, and improve educational outcomes.”
In terms of risks for India’s economy, the report cautioned against India’s high public debt levels and its “recent failure to achieve the budget’s deficit target call for continued fiscal consolidation into the medium term to further strengthen fiscal policy credibility”.
The report added that corporate debt overhang and associated banking sector credit quality concerns “exert a drag on investment in India”.