India is 'easily' the world's fastest-growing economy: IMF chief
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The Indian government announces that the country's economy grew by 8.4% in the last quarter of 2023.
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The seal for the International Monetary Fund (IMF) in Washington, D.C., U.S., Jan. 26, 2022 (AFP)
India is "easily" the world's fastest-growing economy, IMF Executive Director Krishnamurthy Subramanian told CNBC’s Squawk Box Asia on Friday.
India's economy grew by 8.4% in Q4 2023, widely exceeding Reuters' forecasts of 6.6% and marking the country's fastest expansion in six quarters.
Subramanian attributed India's economic growth to a change in the government's emphasis on greater capital expenditure, which has notably risen in recent years.
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The growth was driven by strong private consumption and positive trends in manufacturing and construction activity.
“If you look at the GDP numbers, India’s poised for about 8% growth this year, that makes India easily the fastest-growing economy in the world,” Subramanian said.
The Indian government has also raised its GDP growth outlook for fiscal year 2023-24 from 7.3% to 7.6%.
Read more: Central banks risk sending the developed world into recession: OECD
New Delhi has raised its expected GDP growth for the 2023-2024 fiscal year from 7.3% to 7.4%.
“I do expect the focus on capital expenditure to continue and the fiscal math also is looking very responsible,” he added.
India's economy “ended last year with a bang,” beating most analysts' estimates, said Thamashi De Silva, assistant India economist at Capital Economics.
“That pace of growth was the strongest among major economies last quarter,” she added.
'Giant leap'
In early February, the Indian Finance Ministry revealed a preliminary budget, anticipating a decrease in the fiscal deficit to 5.1% for 2025 from the revised 5.8% for this year. The Ministry also highlighted the government's intention to increase infrastructure spending.
The Indian government approved on Thursday investing over $15 billion into building three semiconductor plants by giant companies such as the Tata Group.
According to a government statement, the factories are anticipated to generate 20,000 advanced tech jobs and approximately 60,000 jobs in the broader community. The government described the investment as a “giant leap" for India's chip's aspirations.
“India already has deep capabilities in chip design. With these units, our country will develop capabilities in chip fabrication,” the statement said.
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