Prime Minister Manmohan Singh said on Wednesday there was a need for an orderly exit from the unconventional monetary policies being pursued by the developed world for the last few years, so as to avoid damaging the growth prospect of the developing world.
Speaking at the airport before leaving for the G-20 summit in St. Petersburg in Russia, Manmohan Singh said there was a slowdown in emerging economies, which are facing the adverse impact of significant capital outflows.
“It is important that G-20 encourages and promote policy coordination among major economies in a manner that provides for a broad-based and sustained global economic recovery and growth,” said PM.
He also underscored the importance of the grouping of industrialised and major developing economies to promotes policy coordination among major economies in a manner that provides for a broad based and sustained global economic recovery and growth.
The Prime Minister made a reference to orderly exit from unconventional monetary policies in the backdrop of splits between emerging markets and the US over its winding down of stimulus and the slowing growth of India and other four BRICS
Singh said though there are encouraging signs of growth in industrialised countries, there is also a slowdown in emerging economies which are facing the adverse impact of significant capital outflow.
Brazil, India, Russia, China and South Africa – grouped in the informal BRICS bloc seen as an alternative economic powerhouse – all go into the meeting experiencing slowing growth, embattled currencies and huge capital outflows.
The Indian rupee has lost one-fifth of its value against the US dollar this year following major capital outflows triggered mainly due to the moves by the Fed Reserve.
India is also suffering a decade-low growth and GDP rose just 4.4 per cent in the first quarter this fiscal, the weakest performance since 2009.
Singh said he will once again emphasise at the Summit that the G2-0 should ensure primacy of the development dimension in his deliberation, focus on job creation, promote investment in infrastructure as the means of stimulating global growth and create potential in developing countries to sustain higher growth in the medium term.