India is set 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. This growth rate is not surprising, given that China is four times larger than India, so it was expected that India would eventually overtake it.
Srinivasan praised India’s economic performance, particularly its projected growth rate of 6.8% for the fiscal year 2024-25, calling it “very impressive.” He also highlighted India’s ability to navigate multiple shocks, such as the COVID-19 pandemic, the Russia-Ukraine war, and recent tensions in the Gulf region. This resilience is due to strong private consumption and public investment.
However, Srinivasan emphasized the need for significant reforms in education and healthcare to fully utilize the potential of India’s expanding labor force. With a young and growing population expected to add about 15 million people to the labor force each year, substantial investments in education and healthcare are crucial so that this demographic advantage can be leveraged effectively. 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.
