Private Investment Still Weak, IMF Flags Roadblock Ahead India’s 2047 Goals

The International Monetary Fund (IMF) said that India needs to step up private investment to keep its growth momentum. It also noted that it is important for India to become a developed nation by 2047.

“We are worried about private investment, which is still lackadaisical… If India wants to become a developed economy by 2047, then private investment needs to gain more momentum,” said Krishna Srinivasan, director of the Asia and Pacific department at IMF.

The IMF director also noted that growth in late 2024 was supported by a pickup in exports and consumption. But the overall growth was weaker than the projection because of a slower-than-anticipated start to public investment following the elections and some other temporary factors. He also added that private investments also remained weak in emerging markets.

"The recovery generally held up with a shift from consumption to investment," he underscored.

Speaking at a press briefing on the economic outlook for Asia and the Pacific on the sidelines of the IMF/World Bank Spring Meetings in Washington, Srinivasan noted that Asia was significantly more exposed and faced a greater potential shock than other regions. “Uncertainty has also increased materially, further worsening the near-term outlook for the region,” he added.

“India could benefit if it opens up to trade, undertakes structural and labour reforms, and engages in longer-term work on education and a push towards public infrastructure, which would increase trade opportunities and allow India to benefit from greater regional and global integration,” said Thomas Helbling, deputy director, Asia and Pacific department at IMF, according to Business Standard.

IMF Trims India's Growth Forecast

The IMF on Tuesday cut India's growth forecast to 6.2% from 6.5% for the current financial year. It has cited ongoing trade tensions as a reason to revise India's growth forecast downward from the January prediction.

The multilateral agency also revised its forecast for FY27 downward and pegged India’s growth at 6.3%from the previous estimate of 6.5%.

Citing a similar kind of challenging global environment, the World Bank also cut its FY26 growth forecast for India to 6.3%, down by 0.4% from its October 2024 projection