In somewhat a relief for India after the IMF’s reports on the country’s growth projection to 4.8 per cent came, its chief Kristalina Georgieva on Friday said the growth slowdown appears to be temporary and expects the momentum to improve going ahead.
IMF chief’s remarks came at World Economic Forum 2020 going on in Davos, Switzerland.
“We had a downgrade in one large market India but we believe that’s temporary. We expect the momentum to improve further going ahead. There are also some bright spots like Indonesia and Vietnam,” Georgieva quoted as saying by PTI.
She said the world appears to be a better place in January 2020 as compared to what it expected when the IMF announced its World Economic Outlook in October last year.
The reason behind the positive momentum she predicted to include receding trade tensions after the US-China first trade deal and synchronised tax cuts, among others.
On Monday, the IMF had slashed India’s growth rate to 4.8 per cent and the global growth rate to 3.3 per cent.
The IMF had attributed the slash in India’s growth rate to the slowdown in demand in the domestic market and stress in the nonbank financial sector.
Read: IMF cuts India’s growth rate to 4.8% citing slowdown in local demand, stress in NBFC sector
However, IMF chief also said the global growth rate to not be a fantastic figure for the world economy.
“It is still sluggish growth. We want fiscal policies to be more aggressive and we want structural reforms and more dynamism,” she said.
In brief information on the condition of the economy around the globe, she praised the African countries on the economic aspects.
“We are living in a more risk-prone world. It is only January and there have been events that are sparking risks for the global economy,” she said.
She listed factors like weakness in long-term productivity growth and low inflation to be the factors affecting the global economy.
(With inputs from Barun Jha/PTI)