India needs to step up private investment to sustain its growth momentum, according to Krishna Srinivasan, Director of the Asia Pacific Department at the International Monetary Fund (IMF).“Private investment needs to pick up,” Srinivasan said, identifying it as a key priority to maintain long-term growth.
He believes the country’s easing inflation trend offers room for monetary policy support. A broad disinflation trend is emerging across Asia, allowing space for rate cuts in economies like India, he said.
While there is significant uncertainty in the global economy, Srinivasan believes that as more countries reach trade agreements with the US, economic forecasts could improve.The IMF recently cut global growth projections due to rising tariff pressures and weak external demand. Asia has faced the sharpest downgrade since the pandemic, with several economies impacted by tighter financial conditions and slowing exports. India, while relatively resilient, also saw its growth forecast revised lower.India’s 2025-26 (FY26) GDP growth forecast has been cut by 30 basis points to 6.2% and 2026-27 (FY27) forecast by 20 bps to 6.3%. IMF said India’s FY26 growth outlook is relatively more stable, supported by private consumption, particularly in rural areas. The estimates are slightly lower than the January 2025 World Economic Outlook (WEO) update on account of trade tensions and global uncertainty.
Also Read: US consumer spending slowing, loan defaults rising amid high rates: Seth FreemanSrinivasan also said Asian economies should reduce reliance on exports and shift focus toward domestic demand to guard against global shocks. He warned that ongoing tariff disputes could impact financial markets, including demand for US Treasuries.Srinivasan also stated that tariff-driven trade tensions pose risks to financial markets, including the global appetite for US Treasuries.Also Read: India has best chance for US deal, yet markets aren’t out of the woods: NomuraFor the entire interview, watch the accompanying videoCatch all the latest updates from the stock market here
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