- October 16, 2019
- Posted by: @webmaster
- Category: Current Affairs News
As per the latest World Economic Outlook Report released by the International Monetary Fund (IMF), India retains its top position as the world’s fastest growing economy tying with China, with an estimated growth rate of 6.1% for the current fiscal year which is almost one percent less than the previous forecasts.
Despite the recent slump the growth for India is has been estimated to pick up in the subsequent fiscal year. As against the grim scene of the economy within the India, the nation’s picture seems quite brighter when viewed globally.
Key Highlights of the Reports
- The World Economy is estimated to grow only at rate of 3% and at 3.4% for the subsequent year amidst the synchronized global economic slowdown.
- India’s growth rate has come down by 0.9% from a 7% made in July. The Indian economy slumped in the second quarter was largely due to the sector-specific weakness in the automobile and real estate sector and owing to uncertainties about the health of non-banking financial companies.
- IMF’s projected growth rate of 6.1 per cent for 2019-20 is consistent with the Indian Monetary Policy Committee’s forecast.
- As per the reports, the growth rates for both India and China is same but it is projected to go down for China in upto 5.8% in the next year.
- United States is expected to slightly better with a 2.1 per cent growth projected for this year and 2.4 per cent for the next.
- In the Euro area, growth is projected to be only 1.2 percent this year and 1.4 next year, with the German economy expected to grow by a dismal 0.5 per cent this year.
- Gita Gopinath, Chief Economist for IMF blame the global slowdown on rising trade barriers, uncertainty surrounding trade and geopolitics and structural factors such as low productivity growth and an aging population in the developed countries.
The IMF suggested that India should use monetary policy and broad-based structural reforms to address cyclical weakness and strengthen confidence.It said: “A credible fiscal consolidation path is needed to bring down India’s elevated public debt over the medium term. This should be supported by subsidy-spending rationalization and tax-base enhancing measures.”
Other measures it suggested included reducing the public sector’s role in the financial system, reforming the hiring and dismissal regulations that “would help incentivize job creation and absorb the country’s large demographic dividend”, and land reforms to expedite infrastructure development.
The World Economic Outlook (WEO) is a report by the International Monetary Fund that analyzes key parts of the IMF’s surveillance of economic developments and policies in its member countries. It also projects developments in the global financial markets and economic systems.
The WEO is usually prepared twice a year and is used in meetings of the International Monetary and Financial Committee.The report encapsulates state of the global economy and highlights risks and uncertainty that threaten growth.