The International Monetary Fund commends India’s economic growth while emphasizing the need for fiscal prudence and consolidation to ensure long-term stability and investment capacity.
WASHINGTON, DC – The International Monetary Fund (IMF) has expressed support for India’s budget strategy, urging the nation to maintain a focus on medium-term fiscal consolidation. On February 19, IMF Communications Director Julie Kozack emphasized the importance of rebuilding fiscal buffers to enhance the country’s economic resilience.
“We’re encouraging them to continue to focus on a medium-term fiscal consolidation path,” Kozack stated during a news conference. She noted that this approach would allow India to reallocate resources currently tied up in debt servicing towards other priority expenditures over time.
The IMF welcomed the direction of the Union Budget, particularly its balance between fiscal consolidation and public investment. Kozack remarked, “We welcome the budget’s continued focus on gradual fiscal consolidation while maintaining critical capital expenditure in India, both at the central government and state levels.”
Her comments reflect the IMF’s belief that sustained fiscal discipline, combined with capital expenditure, is vital for preserving macroeconomic stability and fostering long-term growth.
Kozack also highlighted India’s robust economic performance, describing it as “a key engine for global growth.” She announced an upgrade in the IMF’s growth projections, stating, “The economy has performed well. We’ve upgraded our growth projection in the January World Economic Outlook. Real GDP growth for fiscal year 25-26 is projected at 7.3%. And that’s significantly higher than what we had projected earlier.”
This upward revision in the IMF’s latest World Economic Outlook underscores India’s position as one of the fastest-growing major economies, even as global growth remains uneven.
In addition to fiscal and growth indicators, Kozack noted India’s advancements in emerging technologies. “Of course, our managing director is delighted to be participating in the AI summit. She delivered remarks at the summit earlier today,” she said, adding that the IMF chief was eager to engage with entrepreneurs, the tech industry, and Indian authorities to discuss the country’s progress in artificial intelligence.
India has consistently ranked among the world’s fastest-growing large economies, despite facing tighter global financial conditions and geopolitical uncertainties. The IMF has repeatedly stressed the importance of fiscal prudence, structural reforms, and sustained investment in infrastructure and technology to maintain economic resilience.
The Fund’s latest assessment conveys a calibrated message: preserve growth momentum while steadily reducing fiscal vulnerabilities to create space for future priority spending, according to IANS.