Even as the International Monetary Fund (IMF) cut India’s growth rate, its chief Kristalina Georgieva said that the slowdown is temporary and the momentum is expected to improve going ahead.
Even as the International Monetary Fund (IMF) cut India’s growth rate, its chief Kristalina Georgieva said that the slowdown is temporary and the momentum is expected to improve going ahead, news agency PTI reported. IMF recently slashed the growth estimates for both Indian and the global economy. The global growth is expected to reach 3.3 per cent in 2020, compared to 2.9 per cent in 2019, the slowest pace since the financial crisis a decade ago. The Washington-based international crisis lender revised downward India’s GDP growth projection to 4.8 percent for FY20 and to 5.8 percent for FY21. “(India’s) domestic demand has slowed more sharply than expected amid stress in the non-bank financial sector and a decline in credit growth,” the IMF report said.
The global economy is likely to improve in January 2020 on account of reducing trade tension and the first phase of trade deal getting signed between the US-China, among others, Kristalina Georgieva said at the World Economic Forum (WEF) 2020. IMF had also said that it’s India’s slowdown which is pulling down the global growth forecast. In Q2FY20, India’s GDP grew at a dismal 4.5 per cent, hitting a 26-quarter low. The economy was dragged down by weakness in manufacturing, weak investment, and lower consumer demand, according to the government data. The current 3.3 per cent is not fantastic for the global economy, aggressive fiscal policies are needed along with structural reforms and dynamism, she added.
“We had a downgrade in one large market India but we believe that’s temporary. We expect the momentum to improve further going ahead. There are also some bright spots like Indonesia and Vietnam,” PTI also reported her as saying.