The International Monetary Fund said India has limited room for fiscal stimulus and stressed the need for fiscal consolidation as it has one of the highest debt among the emerging markets.
The IMF staff estimated that India's public sector needs to borrow the amount equivalent to around 8.5 percent of GDP in order to pay for the services it provides.
"Economic development projects and enhanced social initiatives in India will be vital in the coming year," the IMF said in a statement accompanying the Article IV report. But to generate the funds to get them off the ground, public debt must be reduced, the lender noted.
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June 12, 2026 17:14 ET Major central bank action was the focus this week in economic news. The European Central Bank became the first major central bank to move in response to the rising inflationary pressures in the backdrop of the conflict in the Middle East. In North America, the U.S. inflation and trade data as well as Canada’s central bank decision gained attention. The Chinese trade data was the main news in Asia.