Days after the International Monetary Fund (IMF) marginally lowered its growth estimate for India to 4.8 per cent for 2019 citing stress in non-bank financial sector and weak rural income growth, its chief Kristalina Georgieva Friday said growth slowdown in India is temporary.
“Growth slowdown in India is temporary and that it expects momentum to improve going ahead,” PTI quoted Georgieva as saying.
Speaking at the World Economic Forum (WEF) 2020, she also said the world appears to be a better place in January 2020 and the factors driving this positive momentum include “receding trade tension after the US-China first phase trade deal and synchronised tax cuts, among others.”
India, for the current calendar year 2020, saw a sharp 1.2 percentage point cut in its growth forecast to 5.8 per cent, the biggest downward revision for any emerging market, which pulled down global growth forecast.
The country’s GDP growth rate at 4.5 per cent for July-September quarter of 2019-20, has hit a 26-quarter low, dragged down by a contraction in manufacturing, weak investment, and lower consumption demand, as per data from the National Statistical Office (NSO).
However, indicating that a growth rate of 3.3 per cent is not fantastic for the world economy, she said, “it is still sluggish growth. We want fiscal policies to be more aggressive and we want structural reforms and more dynamism.”
According to an update to the IMF’s World Economic Outlook (WEO) released ahead of the World Economic Forum in Davos, global growth is projected to rise from an estimated 2.9 percent in 2019 to 3.3 percent in 2020 and 3.4 percent for 2021 – a downward revision of 10 basis points for 2019 and 2020 and 20 basis points for 2021 compared to the forecast in the October WEO.
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