India macro indicators may return to FY20 levels by FY27, says IMF

India’s combined fiscal deficit (Centre + states) is likely to return to the pre-pandemic level (FY20) of 7.5 per cent of gross domestic product (GDP) only by FY27, according to the International Monetary Fund (IMF).

In its fiscal monitor report by the multilateral lending agency released on Wednesday, the combined fiscal deficit is expected to improve only a tad to 9.9 per cent of GDP in FY23 from 10 per cent in FY22.

IMF also projected India’s combined debt-to-GDP ratio to remain significantly higher than the pre-pandemic level of 75.1 per cent in the coming years and come down slightly to 83.4 per cent in FY23 from 84.2 per cent in FY22.

Although China's debt to GDP ratio is projected to remain at 76.9 in 2022, it is projected to overtake India's ratio in 2024 at 89.8 and continue to increase further to 102.8 in 2027.