IMF official warns of India's high domestic debt

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New Delhi, April 21

The debt crisis has become the main topic of discussion among global financial leaders gathered in Washington for the annual spring meeting of the International Monetary Fund and the World Bank with an official pointing out that India too has a high debt-to-GDP ratio.

The debt crisis of Sri Lanka and Zambia held centre stage, but Paolo Mauro of IMF’s Fiscal Affairs Department said India was starting out with a relatively high debt-to-GDP ratio compared with other emerging economies. “I guess the good news is that most of that debt is in domestic currency,” he said.

But IMF MD Kristalina Georgieva said, “India is one of the economies that is growing at a high rate. Even with the small downgrade, this year’s growth is projected to be 8.2 per cent. Healthy for India, but also positive in a world where growth slowdown is creating a major problem.”

The IMF has projected a “fairly robust” growth of 8.2 per cent for India in 2022, almost twice faster than China’s 4.4 per cent.

“The debt crisis itself is a topic of extensive conversation this week,” said World Bank President David Malpass at a news conference.