New Delhi, October 9: International Monetary Fund Chief Kristalina Georgieva said the global economy is witnessing, “synchronized slowdown” and its effect is “more pronounced” in emerging markets like India.
New Delhi, October 9: International Monetary Fund Chief Kristalina Georgieva said the global economy is witnessing, “synchronized slowdown” and its effect is “more pronounced” in emerging markets like India.
Taking cognisance of the current economic slowdown all across the world, she said: “In the United States and Germany, unemployment is at historic lows. Yet across advanced economies, including in the U.S., Japan, and especially the euro area, there is a softening of economic activity. In some of the largest emerging market economies, such as India and Brazil, the slowdown is even more pronounced this year.”
She added that despite this overall deceleration, close to 40 emerging market and developing economies are forecast to have real GDP growth rates above 5 per cent — including 19 in sub-Saharan Africa.
She also spoke about the ongoing trade issues and its impact on the economy and said: “We have spoken in the past about the dangers of trade disputes. Now, we see that they are actually taking a toll. Global trade growth has come to a near standstill. And the worldwide manufacturing activity and investment have weakened substantially. There is a serious risk that services and consumption could soon be affected.”
While suggesting a slew of measure to combat ongoing slowdown IMF chief said: “We need to act now. We also need to act together. Here is what I see. While the need for international cooperation is going up, the will to engage is going down. Trade is a case in point. And yet, we need to work together. From safely adapting to fintech, to fully implementing the financial regulatory reform agenda, to fighting money laundering and the financing of terrorism.”
Throwing light on the damage that can be done by the ongoing trade tensions between various countries she said that there could be a loss of around $700 billion by 2020 due to the effect of the trade conflicts. “This amount is approximately the size of Switzerland’s entire economy,” she said.
The gross domestic product (GDP) growth of India has steeply fallen to 5 per cent in the quarter ended June, which is the slowest in the last six years. However, 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.
Georgieva taken over as IMF chief from Christine Lagarde last month. Before taking over as IMF chief Kristalina was an economist who had held the No. 2 job at the World Bank.