India is now world’s sixth largest economy: IMF
According to International Monetary Fund’s (IMF) World Economic Outlook (WEO) for April 2018, India is now the world’s sixth largest economy at $2.6 trillion (interms of GDP), displacing France. The five economies ahead are United States, China, Japan, Germany and United Kingdom.
IMF’s April 2018 WEO
India is expected to grow at 7.4% in 2018 and 7.8% in 2019, making it fastest growing economy in the world. India has made progress on structural reforms in recent past, including through implementation of Goods and Services Tax (GST), which will help reduce internal barriers to trade, increase efficiency and improve tax compliance.
The medium-term growth outlook for India is strong but important challenge is to enhance inclusiveness. Moreover, India’s high public debt and recent failure to achieve budget’s deficit target needs fiscal consolidation into e medium term to further strengthen fiscal policy credibility.
The main priorities for India are lifting constraints on job creation and ensuring that demographic dividend is not wasted. For this India needs to ease labour market rigidities, reduce infrastructure bottlenecks, and improve educational outcomes.