India has emerged as the fastest-growing economy, surpassing China, according to Krishna Srinivasan, Director of the IMF’s Asia and Pacific (APAC) Department. While this may not come as a surprise given China’s size, Srinivasan praised India’s economic performance and projected growth rate of 6.8% for the fiscal year 2024-25.
Srinivasan highlighted India’s ability to navigate multiple shocks such as the COVID-19 pandemic, Russia-Ukraine war, and recent tensions in the Gulf region. He attributed India’s impressive growth to strong private consumption and public investment. 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, 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.