IMF says India?s growth momentum is not cyclical but structural, highlights need for sustained fiscal consolidation over medium term

India’s strong economic growth is helping cushion fiscal pressures, though risks from subsidies and elevated debt remain, the International Monetary Fund (IMF) said. Strong growth makes life much easier. It can’t be much in a better position if they were growing as India is growing, Rodrigo Valdes, Director of the IMF’s Fiscal Affairs Department, said during a press briefing on the Fund’s latest Fiscal Monitor. He noted that India’s growth momentum is not cyclical but structural.

The IMF said India’s fiscal targets remain achievable but flagged potential risks from continued support measures. India’s debt-to-GDP ratio remains elevated, and the IMF underscored the need for sustained fiscal consolidation over the medium term. In the medium run, India should sustain the efforts to lower its debt-to-GDP ratio to open space for other emergency spending, Valdes noted.

General Government Debt in India stood at 84.1% of GDP, IMF noted as it projected this metric to ease to 77.7% by 2031.