Chief Economist of The International Monetary Fund Gita Gopinath while speaking at the Times Network India Economic Conclave on December 17 said, “the International Monetary Fund (IMF) is likely to cut India’s growth estimate ‘significantly’ in January 2020.
Crux of the Matter
In the October forecast of the IMF India’s growth was expected at 6.1% in 2019 and up to 7% in 2020. It will be reviewing the October estimates in January.
IMF believes that India has thrown a surprise by being the only emerging market to have had such a performance
Gita Gopinath said, “If you look at recent incoming data, we would be revising our numbers and release them in January, and it is likely to be a significant downward revision for India,”
RBI and some other analysts have already revised its growth estimates downward for FY20 due to the persistent slack in consumption and absence of private investments and exports.
Gita Gopinath doubts the aim to achieve a $ 5 trillion GDP target by FY2025. She pointed out that India will need nominal growth of at least 10.5% compared with 6% in the last six years, and real growth of at least 8-9% to be able to achieve the target.
It is now crucial to bring massive land and labour market reforms to achieve the $5 trillion aspirations.
Curiopedia
The International Monetary Fund (IMF), is an international organization headquartered in Washington, D.C., consisting of 189 countries working to foster global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth, and reduce poverty around the world while periodically depending on World Bank for its resources. Formed in 1944 at the Bretton Woods Conference primarily by the ideas of Harry Dexter White and John Maynard Keynes, it came into formal existence in 1945 with 29 member countries and the goal of reconstructing the international payment system. It now plays a central role in the management of balance of payments difficulties and international financial crises. Countries contribute funds to a pool through a quota system from which countries experiencing a balance of payments problems can borrow money. More Info
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