The Indian government has disputed the International Monetary Fund’s forecasts that its general government debt will exceed 100% of GDP by 2027-28, saying it has done well and is currently below the 2002 debt level. The government also claimed that other nations will perform worse.
The Indian government says that IMF estimates on government debt vulnerabilities are inaccurate, saying that it has done well and is still below the 2002 debt level.
One of the IMF’s newest reports predicted that general government debt will exceed 100% of GDP by 2027-28, but the government called it ‘misconstrued’.
India added that numerous other nations will perform worse.
Also, the same analysis suggests that under favorable conditions, the general government debt to GDP ratio may fall below 70% in the same period.
“Therefore, any interpretation that the report implies that general government debt would exceed 100% of GDP in the medium term is misconstrued,” the ministry said in its IMF report rebuttal after the annual Article IV consultation with Indian authorities.
The statement added the ‘worst-case’ scenarios for the USA, UK, and China are 160, 140, and 200 percent, respectively, compared to 100 percent for India.
State legislatures monitor fiscal responsibility legislation passed by each state.
“Therefore, it is expected that the general government debt will decline substantially in the medium to long term,” stated.
The IMF’s Article IV consultation report released this week said that while the budget deficit has decreased, public debt remains high and fiscal buffers must be restored.
Current and medium-term economic policy and forecasts are reviewed by IMF.
Conclusion
The Indian government has questioned the IMF’s forecasts that general government debt will exceed 100% of GDP by 2027-28. The government claimed the report is “misconstrued” and that other nations will perform worse. The US, UK, and China have worse-case scenarios than India, the administration said. According to the IMF’s Article IV consultation report, the budget deficit has decreased but public debt remains high and fiscal buffers must be restored.
