India needs to create high-quality jobs, increase productivity growth: IMF

Washington: India would need higher productivity growth, stronger private investment and faster creation of high-quality jobs to achieve the medium-term potential growth of 6.8 per cent, the International Monetary Fund (IMF) said on Thursday.

In its October World Economic Outlook, the IMF had upgraded India’s medium-term potential growth to 6.8 per cent from its earlier estimate of 6.5 per cent.

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The upgrade took into account a few factors, including favourable demographics, a large and growing domestic economy or domestic market for goods, and continued momentum on structural reforms, Julie Kozack, Communications Director, IMF, told reporters here.

“But in general, like in many countries, we are encouraging India to take continuing reforms, particularly to focus on how productivity growth can be increased,” she said in response to a question from PTI.

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The IMF official said that to further the medium-term potential, India would need higher productivity growth, stronger private investment, and faster creation of high-quality jobs.Kozack said these issues will come up during the Article 4 consultations with India.

Last month, the IMF raised India’s growth forecast for fiscal year 2027 and fiscal year 2028 to 7 per cent, from the 6.4 per cent and 6.7 per cent projections respectively made in July.

“India does remain a key growth engine for the world. The economy has strong fundamentals and has shown considerable resilience,” Kozack said.