India is expected to surpass China as the fastest-growing economy in the world, according to Krishna Srinivasan, Director of the IMF’s Asia and Pacific (APAC) Department. Srinivasan explained that China is four times larger than India, so it is only natural that India would grow faster. He praised India’s economic performance, particularly its projected growth rate of 6.8% for the fiscal year 2024-25, calling it “impressive.”
Srinivasan highlighted India’s ability to navigate multiple shocks in recent years, including the COVID-19 pandemic, the Russia-Ukraine war, and tensions in the Gulf region. He attributed India’s impressive growth to strong private consumption and public investment, with no major red flags on the horizon. However, he emphasized the need for significant reforms in education and healthcare to fully utilize the potential of India’s expanding labor force.
India has a young and growing population expected to add about 15 million people to the labor force each year. To leverage this demographic advantage, Srinivasan stressed the importance of substantial investments in education and healthcare so that the growing labor force can effectively contribute to the economy. While expressing optimism about India’s medium-term prospects with a growth rate of around 6.5%, Srinivasan underlined the importance of implementing comprehensive reforms to achieve sustainable growth in the coming years.
In summary, Srinivasan’s insights shed light on India’s economic outlook and its potential to maintain its rapid growth trajectory through strategic reforms and investments in key sectors like education and healthcare.