New Delhi, May 1 (KNN) In its latest Regional Economic Outlook for Asia and Pacific, the International Monetary Fund (IMF) has emphasised the crucial role played by public investment in driving India's economic growth, making it the world's fastest-growing major economy.

The IMF report highlights that while headline inflation in several Asian and Pacific economies may witness further reductions due to lower energy prices, India's disinflation process could be slower due to persistent food price pressures, especially for rice.

Reflecting the positive economic trajectory, the IMF had earlier this month raised India's growth forecast for the financial year 2024-25 to 6.8 per cent, up from the previous estimate of 6.5 per cent.

The growth forecast for 2025-26 remains unchanged at 6.5 per cent. The IMF attributed this upward revision to the resilience of domestic demand, propelled by factors such as public investment.

The report commends India and the Philippines for being sources of repeated positive growth surprises, underpinned by robust domestic demand.

This highlights the importance of nurturing domestic economic drivers, including public investment, to sustain growth momentum.

While acknowledging the potential risks posed by global conflicts and trade frictions, the IMF emphasises the urgency of fiscal consolidation in Asia to address the burden of higher debt levels and rebuild fiscal space.

This underscores the need for a balanced approach, where public investment continues to drive growth while maintaining fiscal prudence.

Overall, the IMF's remarks underscore the pivotal role of public investment in fuelling India's economic growth, while also highlighting the need for targeted measures to address inflationary pressures and maintain fiscal sustainability.

(KNN Bureau)