World Bank-International Monetary Fund (IMF) annual meetings kicked off on a somber note, with the IMF downgrading global growth in 2019 to 3%, the slowest since the global financial crisis. India’s growth projections have also been downgraded to 6.1% and 7.0% in 2019 and 2020 respectively, down by 1.2 percentage points and 0.5 percentage points relative to April projections, owing to weaker than expected domestic demand.
Globally, rising trade barriers, heightened uncertainty around trade and geopolitics, idiosyncratic factors that have strained several emerging markets and structural factors such as advanced economies’ ageing population and low productivity growth were the causes behind a “synchronized slowdown” the IMF said in its 2019 World Economic Outlook (WEO) Global Manufacturing Downturn, Rising Trade Barriers report, released on Tuesday morning.
India’s growth rate in the April-June quarter had hit 5% , the lowest in six years, as per government data. Consumption, investment and exports were down. The World Bank too on Sunday had projected that India’s growth rate would fall to 6.0% from 6.9% in 2018.
India’s case will be supported by lagged effects of monetary policy easing, cuts to corporate tax, measures to address environmental and corporate uncertainty, and government programs to boost rural consumption, as per the WEO.
The Index of Industrial Production for India was 1.1%, month on month, in September — its lowest since February 2013.
“Appropriate steps have been taken …there is still a lot more do be done, including cleaning up of the balance sheets of regular commercial banks. The premise (for India’s growth projections) is that these particular bottlenecks will clear up,” Ms Gopinath said on Tuesday.
No comments:
Post a Comment