IMF Official Says India To Record Strong Growth Ahead, Check Out His Exact Estimate

The official said that the average inflation rate in the country would remain around 5 per cent in the future and the target of 8 per cent was ambitious for India, however, it remained achievable

Speaking at an event, Krishnamurthy V Subramanian, Executive Director, IMF, said that India is set to expand to become a $55 trillion economy by 2047. 

Source : ABPLIVE AI

Indian economy is expected to grow further at an average real growth rate of 8 per cent in the coming years, an official with the International Monetary Fund (IMF) revealed on Tuesday. Speaking at a Business Today event, Krishnamurthy V Subramanian, Executive Director, IMF, said that India is set to expand to become a $55 trillion economy by 2047. 

The official said that the average inflation rate in the country would remain around 5 per cent in the future, reported Business Standard. Subramanian noted that the target of 8 per cent was ambitious for India, however, it remained achievable. The demography and nature of policies to be implemented in the next ten years would help India achieve this growth trajectory, he added. These policies include areas such as innovation, public digital infrastructure, and entrepreneurship.

Formal Economy

“If you take entrepreneurship, World Bank data from 2004 to 2014 shows that new firm creation was 3.2 per cent on average. From 2014 onwards, this new rate is orders of magnitude higher,” Subramanian stated.

The official said that India has the third-largest entrepreneurial ecosystem globally and this will contribute to the growth in the formal economy. This will in turn result in increasing productivity as majority of the economy is informal in nature and the companies in the informal sector lag behind those in the formal one.

“Formalisation is going to be a key driver for productivity growth in India, which is already happening through the (vast) public digital infrastructure,” Subramanian noted.

Notably, the World Bank lately said that India would need 75 years to achieve one-fourth of the per capita income level of the US. Regarding this, the IMF official said that the term middle class isn't strictly defined and has a wide scope. Therefore, even if a country manages to increase its GDP per capita by four times, it will find it difficult to escape the middle-income trap.