BENGALURU (Reuters/Web Desk) – Indian economy is projected to grow at 6.3 per cent in the current fiscal year and the next, the International Monetary Fund (IMF) said late Monday, supported by macroeconomic and financial stability.
The country’s digital public infrastructure and a strong government infrastructure programme will continue to sustain growth, the IMF said in its Article IV consultation report, which reviews a country's current and medium-term economic outlook.
"India has potential for even higher growth, with greater contributions from labour and human capital, if comprehensive reforms are implemented," the IMF said.
The IMF's growth projection for the current financial year, ending March 31, 2024, is lower than the 7pc forecast by the Reserve Bank of India (RBI).
"Headline inflation is expected to gradually decline to the target although it remains volatile due to food price shocks," the IMF said.
Volatile food prices pushed up retail inflation to 5.55pc in November from 4.87pc the previous month. While this was within the RBI's tolerance band of 2pc-6pc, it remains above the target of 4pc.
Earlier, S&P Global Ratings had said in a report that India will remain the fastest-growing major economy for at least the next three years, setting it on course to become the world's third-largest economy by 2030.
S&P expects India, currently the world's fifth-largest economy, to grow at 6.4pc this fiscal and estimates growth will pick up to 7pc by fiscal 2027. In contrast, it expects China's growth to slow to 4.6pc by 2026 from an estimated 5.4pc this year.
Similarly, a Reuters poll of economists showd that .India's economic expansion likely moderated but remained strong in the September quarter, supported by robust service activity and solid urban demand despite a global slowdown dampening export growth
Gross domestic product (GDP) growth is forecast to have slowed to 6.8pc in the July-September quarter from 7.8pc in the previous quarter, according to the median forecast of 55 economists polled from Nov 17-27.