India says IMF debt warning a worst case scenario

The IMF, in a so-called article IV review, said India's general government debt, which includes federal and state government debt, could be 100% of GDP under adverse circumstances by fiscal 2028.

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India's debt to GDP ratio, which was 81% in 2022/23, may decline to below 70% in the same period under favourable circumstances, the IMF report also said, according to the ministry.

The Indian government said on Friday a warning from the International Monetary Fund (IMF) that the country’s debt to GDP ratio could hit 100% was a worst-case scenario, and not a “fait accompli”.

The IMF, in a so-called article IV review, said India’s general government debt, which includes federal and state government debt, could be 100% of GDP under adverse circumstances by fiscal 2028.

India’s finance ministry said this was “a worst-case scenario and is not fait accompli”.

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India’s debt to GDP ratio, which was 81% in 2022/23, may decline to below 70% in the same period under favourable circumstances, the IMF report also said, according to the ministry.

“Therefore, any interpretation that the report implies that General Government debt would exceed 100% of GDP in the medium term is misconstrued,” the ministry added.

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