India is poised to become the fastest-growing economy in the world, surpassing China, according to Krishna Srinivasan, Director of the IMF’s Asia and Pacific (APAC) Department. In a conversation with ANI, Srinivasan explained that India’s projected growth rate of 6.8% for the fiscal year 2024-25 is “very impressive” given its size.
Srinivasan praised India’s ability to navigate multiple shocks such as the COVID-19 pandemic, the Russia-Ukraine war, and tensions in the Gulf region. He highlighted India’s resilience and successful management of these shocks in recent years. The IMF Director credited India’s impressive growth to strong private consumption and public investment, with no red flags in the near term.
However, Srinivasan emphasized the need for significant reforms, particularly in education and healthcare. He pointed out that India’s young and growing population will add about 15 million people to the labor force each year. To fully leverage this demographic advantage, substantial investments in education and healthcare are necessary to ensure that this population contributes effectively to the economy.
Srinivasan expressed optimism about India’s medium-term prospects with a growth rate of around 6.5%. However, he stressed that implementing comprehensive reforms is crucial for achieving this goal. With diligent implementation of reforms, India could achieve a growth rate of 6.5% or higher over the next several years.
