ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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An Elusive Take-off

Savings and investment constraints severely limit the medium-term growth potential of the economy.

The International Monetary Fund (IMF) report on the Article IV consultations in December 2023 presents a relatively less optimistic scenario of the overall prospects of the Indian economy. Acknowledging India as one of the fastest-growing economies globally, it also asserts that productivity gains and a strong government infrastructure programme will continue to sustain growth. However, its estimates show that growth had slowed down from 9.1% in 2021–22 and 7.2% in 2022–23 to just 6.3% in both 2023–24 and 2024–25.

Moreover, the IMF estimates also show that the economy’s output gap, which was as high as -7.4 during the pandemic, has ebbed and finally closed in 2023–24. Though the potential growth has been revised up to 6.3% in 2023–24, it is estimated to remain so over the medium term. This is a sharp climbdown from the pre-pandemic years when the potential gross domestic product (GDP) growth of the economy was a much higher 7.3%.

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Updated On : 13th Jan, 2024
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