IMF urges India to focus on better jobs and higher productivity to sustain growth

India needs faster creation of high-quality jobs, stronger private investment, and higher productivity growth to hit its medium-term potential growth rate of 6.8 percent. The International Monetary Fund shared this assessment on Thursday from Washington.

Growth Outlook

In its October World Economic Outlook, the IMF upgraded India's medium-term potential growth from 6.5 percent to 6.8 percent. Julie Kozack, Communications Director for the IMF, told reporters that the upgrade reflects favourable demographics, a large domestic market, and continued structural reforms. Last month, the IMF also raised India's growth projection for fiscal year 2027 and fiscal year 2028 to 7 percent, up from earlier estimates of 6.4 percent and 6.7 percent.

Official Stance

While praising India as a key global growth engine with strong economic fundamentals and resilience, the IMF continues to encourage ongoing reforms. Ms. Kozack noted that productivity growth and related economic priorities will come up during the upcoming Article 4 consultations with the country.

Context

International financial bodies like the IMF regularly review member nations' economic policies and growth trajectories through consultations and reports. These assessments help guide national policymakers on structural adjustments needed to maintain long-term economic stability and employment generation.