India’s general government fiscal deficit is expected to improve to 8.9% of GDP in 2023from an estimated 9.6% of GDP in 2022, according to the International Monetary Fund. It is projected to further ease to 8.3% of GDP in 2024, according to the IMF’s Fiscal Monitor Report.
The report has projected India’s general government debt to remain largely stable at 83.2% of the GDP in 2023 as against 83.1% of the GDP in 2022.
The report however said that in 2023, overall fiscal deficits are expected to increase slightly to 5% of GDP on average, “as governments face higher interest bills and pressures to increase public spending, including spending on wages and pensions, to catch up with past inflation”.
Over the medium term, fiscal deficits are projected to remain above pre-pandemic levels in the next few years, it further said, adding that the fiscal outlook is subject to significant uncertainty as the global economy rebounds from a series of shocks.