Effect of global economic slowdown ‘more pronounced’ in India: IMF chief
Kristalina Georgieva, the new chief of International Monetary Fund, has said the global economy is witnessing “synchronized slowdown” and its effect is “more pronounced” in emerging markets like India.
In her speech, ahead of the IMF-World Bank autumn meetings next week, Georgieva said slower growth is expected this year in nearly 90% of world economies.
The IMF boss said growth in 2019-2020 will fall to its lowest rate since the beginning of the decade due to widespread deceleration. “In the United States and Germany, unemployment is at historic lows…In some of the largest emerging market economies, such as India and Brazil, the slowdown is even more pronounced this year,” she said.
Georgieva took over from Christine Lagarde as the head of the IMF earlier this month.
The Indian economy is facing a slowdown. The gross domestic product (GDP) growth slowed to 5% in the quarter ended June, the slowest pace it has grown since March 2013, when it expanded 4.7%.
This was the fifth straight quarterly decline in growth. Slowing household demand, which took its toll on other sectors, was one of the major factors for the decline in growth.
In July this year, IMF had projected a slower economic growth for India and cut its projection by 0.3 percentage points for both 2019 and 2020. It said India’s GDP will grow at 7 and 7.2 per cent in 2019 and 2020.
The world economy had been projected to grow by 3.2 percent in 2019 and 3.5 percent in 2020 but Georgieva said on Tuesday that the IMF is cutting its forecasts. The IMF is expected to release details in its updated World Economic Outlook on October 15.
The IMF chief also warned that there could be a loss of around $700 billion by 2020 due the effect of the trade conflicts. “This amount is approximately the size of Switzerland’s entire economy,” she said.
(with agency inputs)