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IMF Lauds Modi Government For “Right” Policies Aimed At Lowering India’s Debt
Managing Director of IMF Christine Lagarde (R) and Indian Finance Minister Arun Jaitley (L). (Photo Credit: SAJJAD HUSSAIN/AFP/Getty Images)
India is trying to lower “high” debt to gross domestic product (GDP) ratio using "the right policies," the International Monetary Fund (IMF) has said, according to NDTV.
India’s combined gross debt, according to IMF, is set to decline by almost nine percentage points. This would not only create conditions for lowering of interest rates in the country but can also lead to a sovereign rating upgrade.
IMF’s projections are in line with the central government’s target of bringing down debt-to-GDP ratio to 40 per cent by 2024-25.
“What will support a gradual decline in debt-to-GDP ratio is both gradual reduction in overall deficit as well as continued high nominal GDP growth,” IMF’s senior resident representative for India Andreas Bauer said.
In its Economic Outlook released on Tuesday, the IMF said India’s economic growth to accelerate to 7.4 per cent in 2018-19 and touch 8.2 per cent by 2023-24.
The IMF has cautioned other major economies, especially China, saying public debt in "currently at historic highs." The IMF advised advanced and emerging market economies like China to "avoid policies that increase economic fluctuations."
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