The International Monetary Fund (IMF) has said that India’s debt-to-GDP ratio rose from 74 percent to 90 percent during the Covid-19 pandemic and hoped that it would come down to 80 percent with the economic recovery.
Paolo Mauro, deputy director of the IFF’s Department of Fiscal Affairs, said here on Wednesday that the debt ratio was 74 percent of gross domestic product (GDP) at the end of 2019 before the pandemic in India’s case, and at the end of 2020 it increased to about 90 of GDP. The percentage is gone. This is a huge growth, but other emerging markets and advanced economies have experienced the same.
He further said that in the case of India, we hope that with the improvement in the economy, the debt ratio will come down gradually. In the medium term, it can come down to 80 percent level with healthy economic growth.
In response to a question, he said that the first priority is to continue helping people and companies and especially focus on helping the most vulnerable people.
Mauro hoped that next year India’s general budget could see an attempt to reduce the deficit. Meanwhile IMF managing director Kristalina Georgieva has said that the world is suffering from the biggest global recession since the Second World War. He said at the beginning of the IMF and World Bank annual on Wednesday that the situation is expected to improve further, as millions of people are benefiting from vaccination and policy support.
He said that many extraordinary and mixed steps have been taken in the last 1 year. Georgiva said that without these fiscal and monetary measures, the global recession of last year could have been 3 times worse. He said that we have a good news that the lights are showing at the end of the tunnel. The biggest global recession after the Second World War is being replenished. As you know, yesterday we raised our global growth forecast to 6 percent.