- Friday 28 Feb 2020
Effects of global slowdown more pronounced in India: IMF chief
PTI, Oct 9, 2019, 11:18 AM IST
Washington: The global economy is witnessing “synchronized slowdown”, which will result in slower growth for 90 per cent of the world this year, and the effect is even “more pronounced” in some of the largest emerging market economies like India, new IMF chief Kristalina Georgieva has warned.
The Managing Director of International Monetary Fund (IMF) pointed out that the widespread deceleration means that this year’s growth will fall to its lowest rate since the beginning of the decade.
She said the World Economic Outlook to be released next week will show downward revisions for 2019 and 2020. “In 2019, we expect slower growth in nearly 90 per cent of the world. The global economy is now in a synchronized slowdown,” Georgieva said on Tuesday, in her curtain-raiser speech for the IMF and World Bank’s annual meeting here next week. “The headline numbers reflect a complex situation,” she said.
Softening economic activity
Despite this overall deceleration, close to 40 emerging market and developing economies are forecast to have real GDP growth rates above 5 per cent — including 19 in sub-Saharan Africa, the IMF chief said.
In the United States and Germany, unemployment is at historic lows. Yet across advanced economies, including in the US, Japan and especially the euro area, there is a softening of economic activity, she said.
“In some of the largest emerging market economies, such as India and Brazil, the slowdown is even more pronounced this year. In China, growth is gradually coming down from the rapid pace it saw for many years,” Georgieva said.
The precarious outlook presents challenges for countries already facing difficulties — including some of the Fund’s programme countries, she noted.
Georgieva called for using monetary policy wisely and enhancing financial stability. “Now is the time for countries with room in their budgets to deploy — or get ready to deploy — fiscal firepower. In fact, low-interest rates may give some policy makers additional money to spend,” she said.
Referring to a new IMF research, which shows how structural reforms can raise productivity and generate enormous economic gains, Georgieva said these changes are the key to achieving higher growth over the medium and long-term.
“The right reforms in the right sequence could double the speed at which emerging markets and developing economies reach the living standards of the advanced economies,” she said. While the need for international cooperation is going up, the will to engage is going down, she rued.
“Trade is a case in point. And yet, we need to work together. From safely adapting to fintech, to fully implementing the financial regulatory reform agenda, to fighting money laundering and the financing of terrorism,” she said.
Describing climate change as a crisis where no one is immune and everyone has a responsibility to act, the IMF chief said that one of its priorities was to assist countries as they reduce carbon emissions and become more climate resilient.
At the current average carbon price of USD 2 per ton, most people and most companies have little financial incentive to make this transition. Limiting global warming to a safe level requires a significantly higher carbon price, she added.
New Delhi: The National Company Law Appellate Tribunal (NCLAT) has set aside the order of the NCLT to initiate insolvency proceedings against e-commer....
New Delhi: With the April 1 deadline for mega merger of 10 state-run banks into four fast approaching, Finance Minister Nirmala Sitharaman on Wednesda....
New Delhi: The government is looking at revamping the 20-year old IT Act to keep pace with the advancement in the technology ecosystem, and bring in a....
New Delhi: Auditors will have to provide detailed disclosures about loan defaults, amount of cash losses and immovable properties as well as other asp....
New Delhi: The Centre on Tuesday proposed draft rules on battery waste management directing manufacturers and importers to ensure that used batteries ....
Mumbai: Irrfan Khan is returning to the movies with "Angrezi Medium" and his co-stars from the film Radhika Madan and Deepak Dobriyal are in awe of th....
Mumbai: Actor Jacqueline Fernandez is all set to feature in a music video along with "Bigg Boss" runner up Asim Riaz and the actor says she's excited ....
Dehradun: Union Law Minister Ravi Shankar Prasad on Thursday said there is no question of going back on the Citizenship (Amendment) Act, but the gover....
Mumbai: Teaming up with the Tabu was always on his to-do list, a wish filmmaker Anees Bazmee is now fulfilling with "Bhool Bhulaiyaa 2". The direct....
New Delhi: The Delhi government will give Rs 10 lakh to the families of those who lost their lives in the communal violence in northeast Delhi, Chief ....