The economy of the world is in doldrums amid intensifying trade tariff war added with surging crude prices. Recently, the International Monetary Fund (IMF) cut the global growth outlook for both fiscal 2018 and fiscal 2019. Here comes in a good news for India - the IMF top official confirmed that the country's debt is lower than the best in the world.
India is one of the emerging markets in the world. The country is currently witnessing an economic slowdown owing to a rise in crude prices which has ballooned its current account deficit for fiscal 2018 to touch a staggering $187.8 billion. Added to this the diminishing value of Indian currency has further shadowed the economic growth parameters.
The recent report from IMF has bought in much-needed relief to the country. Vitor Gasper, the Director of the Fiscal Affairs Department in IMF stated that India's debt was substantially less when compared to the global debt as a percentage of world Gross Domestic Product (GDP).
The private debt of the country in 2017 was 54.5% of the GDP and the general government debt stood at 70.4% of the GDP, a total debt of about 125 of the GDP, as per the latest IMF figures. In contrast, China's debt stands at 247 percent of the GDP.
Mr Gasper noted 'So, it is substantially less than the global debt as a percentage of world GDP'. He also added that India's debt is below the average of advanced economies and below the average of emerging market economies.
The top IMF official said that "There is a positive relation between the debt to GDP ratio and the level of GDP per capita. If you compare around the world with the best economies or emerging market economies, the level of debt in India is lower."
Currently, as per the IMF report, the global debt stands at a new record high of $182 trillion in 2017.
The private debt in India has substantially declined from almost 60 percent to 54.50 percent. According to Gasper, in emerging market economies private debt has risen much faster than public debt.