IMF’s Gita Gopinath cheers ‘fastest growing’ Indian economy

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Gita Gopinath says India to become 3rd largest economy by 2027

By Our Special Correspondent

New Delhi, August 17: International Monetary Fund (IMF) has showered praises on the Indian economy. Deputy managing director of the IMF, Gita Gopinath, has asserted that India is on course to become the third largest economy in the world.

Gopinath called on Union Minister for Finance Nirmala Sitharaman on Saturday. She is taking part in the Diamond Jubilee celebrations of the Delhi School of Economics.

Gopinath discussed the state of the Indian economy with Sitharaman. The finance minister said that she is looking for more collaboration with the IMF.

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The Indian-origin IMF official said after meeting Sitharaman that India may become the third largest economy by 2027. India is currently the fifth largest economy.

The US, China, Japan, and China are the four top economies of the world. The crash of the Japanese currency has expedited the shuffle in the ranking of the large economies.

Besides, Germany in line with Europe is in an economic tailspin after the energy lifeline with Russia was disrupted due to the Ukraine War. Germany is wooing China to find a saving grace for its faltering economy.

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“India’s growth rate is much better than anticipated earlier. There is a surge in consumption across sectors,” Gopinath was quoted in the media reports, saying on the outlook of the Indian economy.

The IMF official is optimistic on two counts – consumption rebound and good Monsoon. She argued that the consumer behaviour is on a surge. That coupled with good prospects of agriculture may give fresh impetus to the Indian economy.

Sharing her perspective on meeting with Gopinath, Sitharaman posted on X, formerly Twitter, that India will look to expand collaboration with the IMF. Sitharaman in her Budget proposals unveiled last month proposed arranging funds for Andhra Pradesh from the multilateral institutions.

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Besides, India was instrumental in Sri Lanka availing a lifeline from IMF after announcing a sovereign default in 2022. The government is hinting to tap the low-cost funds of the multilateral institutions for the needs of the states.

Gopinath was effusive in her praise of Sitharaman sticking to the fiscal prudence. Sitharaman projected fiscal deficit below 4.5 per cent for 2025-26.

The retail inflation in July crashed to a five-year low at 3.54 per cent. The US federal reserve is widely expected to begin cutting rates from next month. This is also likely to bring better fund flow to India.

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