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September 25, 2020

Growth is slow in India, hope to improve soon, says IMF chief

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IMF chief Kristalina Georgieva on Friday said growth slowdown in India appears to be temporary and she expects the momentum to improve going ahead.

Speaking here at the WEF 2020, she also said the world appears a better place in January 2020 compared to what it was when IMF announced its World Economic Outlook in October 2019.

IMF chief Kristalina Georgieva said growth slowdown in India appears to temporary

She said the factors driving this positive momentum include receding trade tension after the US-China first phase trade deal and synchronized tax cuts, among others.

She, however, said a growth rate of 3.3 percent not fantastic for the world economy.

“It is still sluggish growth. We want fiscal policies to be more aggressive and we want structural reforms and more dynamism,” the managing director of the International Monetary Fund (IMF) said. In emerging markets, she said they are also moving forward.

Economy caught in the era of low consumption and low investment demand

Earlier the agency felt that there would some improvement in this financial year. However, but the Indian economy stuck in a period of low consumption. Also, low investment demand. The growth rate in 2018-19 was 6.8 percent, which means it is down by 1.8 percent. All the world’s rating agencies and the International Monetary Fund have also drastically reduced India’s GDP estimate.

Economist Sunil Sinha of India Ratings & Research said, “We expected some improvement in FY 2021, but there is a risk that the Indian economy is looking at a cycle of low consumption and weak demand.”

IMF has given a blow to GDP growth

The International Monetary Fund has lowered the GDP growth rate. However, to estimate for the current financial year for India to 4.8 percent. The growth forecast of the world has had to reduce due to sluggishness in India. Also, other emerging countries like it. Earlier, the IMF had released an estimate of 6.1 percent growth in the current financial year. Whereas the IMF had an estimated 7.5 percent in the same period a year ago.

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