India: 2012 Article IV Consultation-Staff Report; Staff Statement and Supplements; Public Information Notice on the Executive Board Discussion; and Statement by the Executive Director for India
IMF Staff Country Reports, April 18, 2012
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- India: 2012 Article IV Consultation-Staff Report; Staff Statement and Supplements; Public Information Notice on the Executive Board Discussion; and Statement by the Executive Director for India
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Bibliographic details
- Published: April 18, 2012
- Series: IMF Staff Country Reports
Key findings
- India’s growth remains relatively high.
- The unsettled global outlook and slow government decision making have weighed on investment.
- Inflation has moderated, leading the Reserve Bank of India (RBI) to pause monetary tightening, but inflation remains elevated.
- The slow pace of fiscal consolidation has added to demand pressures.
- Ensuring sustainable growth will require reinvigorating the structural agenda rather than relying on monetary and fiscal stimulus.
Risks and macro drivers
- External risks: an unsettled global outlook that can dampen export demand and capital flows.
- Domestic policy frictions: slow government decision making that reduces investment momentum.
- Policy stance interactions: a pause in monetary tightening by the RBI amid still-elevated inflation, and a gradual fiscal consolidation that leaves demand pressures.
Policy recommendations and structural priorities
- Reinvigorate structural reforms to support sustainable growth rather than depending on monetary and fiscal stimulus.
- Facilitate infrastructure investment to address bottlenecks constraining growth.
- Reform the financial sector to improve credit allocation and support private investment.
- Reform labor markets to enhance flexibility and employment outcomes.
- Address agricultural productivity and skills mismatches to raise potential growth and labor market efficiency.
Subjects and keywords (as listed)
- Subject: Exports, External debt, Financial services, Inflation, International trade, Prices, Public debt, Real interest rates
- Keywords: CPI-IW inflation momentum, CR, debt, deficit, East Asia, Eastern Europe, Exports, Global, import growth, Inflation, inflation pressure, ISCR, portfolio equity inflow, Real interest rates, staff appraisal
India: 2012 Article IV Consultation-Staff Report; Staff Statement and Supplements; Public Information Notice on the Executive Board Discussion; and Statement by the Executive Director for India