India government says IMF debt warning a worst case scenario

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The IMF, in a so-called article IV review, said India’s general government debt, which includes federal and state government debt, could be 100% of GDP under adverse circumstances by fiscal 2028.

IMF, International Monetary Fund, IMF, GDP growth, Tax to GDP ratio, Indian express business, business news, business articles, business news storiesIndia’s debt to GDP ratio, which was 81% in 2022/23, may decline to below 70% in the same period under favourable circumstances, the IMF report also said, according to the ministry.

The Indian government said on Friday a warning from the International Monetary Fund (IMF) that the country’s debt to GDP ratio could hit 100% was a worst-case scenario, and not a “fait accompli”.

The IMF, in a so-called article IV review, said India’s general government debt, which includes federal and state government debt, could be 100% of GDP under adverse circumstances by fiscal 2028.

India’s finance ministry said this was “a worst-case scenario and is not fait accompli”.

India’s debt to GDP ratio, which was 81% in 2022/23, may decline to below 70% in the same period under favourable circumstances, the IMF report also said, according to the ministry.

“Therefore, any interpretation that the report implies that General Government debt would exceed 100% of GDP in the medium term is misconstrued,” the ministry added.

First published on: 22-12-2023 at 23:48 IST

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