Tag: IMF

  • Act now to bring down inflation, safeguard financial stability, IMF chief to policymakers 

    By PTI

    WASHINGTON: The International Monetary Fund on Thursday urged policymakers across the world to act now to bring down inflation, put in place responsible fiscal policy, safeguard financial stability and carry reforms to address climate change, make digitalisation work for people and address inequality.

    Speaking to reporters at a press conference here, IMF Managing Director Kristalina Georgieva said, “The IMF is working with our 190 members on these issues. Our economic analysis is front and centre to help countries navigate this complex environment and avoid policy mistakes.”

    Describing it as a difficult global environment, Georgieva said the world economy has been hit by one shock after another- the coronavirus pandemic, Russia’s invasion of Ukraine and climate disasters on every continent.

    They continue to harm people’s lives and they have caused a cost-of-living crisis, she noted.

    “The immediate toll is clear. On Tuesday, we cut our global growth forecast to 2.7 per cent in 2023. Across many economies, the risks of recession are rising. And even when growth is positive, for many people, it will feel like a recession because of rising prices and shrinking real incomes,” she said.

    On top of this, risks to financial stability are growing and uncertainty remains exceptionally high.

    “Our World Economic Outlook shows a one-in-four chance that global growth could drop to a historic low of 2 per cent next year,” she said.

    “These repeated shocks and growth setbacks raise a bigger question: are we experiencing a fundamental economic shift in the world economy from a world of relative predictability and stability, to greater uncertainty and volatility,” she said.

    Georgieva said the IMF sees very clear areas where they can do better, even in this more complex environment.

    “First, bring inflation down. We know that rising interest rates come at a cost to growth. But we also know that not tightening enough to put a leash on inflation would mean interest rates staying higher for longer, resulting in even more harm to growth and people. For central banks, this means taking decisive action when necessary, and communicating as clearly as they can,” she said.

    Second, act now to put in place responsible fiscal policy.

    “We must prioritise protecting vulnerable households and businesses. But we have to do that at a time when fiscal buffers are exhausted because of the pandemic and levels of debt are very high. The obvious conclusion is that policy measures need to be temporary and well-targeted. Steer away from across-the-board fiscal support that is neither effective nor affordable,” she said.

    “If we are to help people and fight inflation, we must ensure that fiscal and monetary policies go hand in hand. When monetary policy hits the brakes, fiscal policy should not step on the accelerator that would make for a very dangerous ride,” she said.

    “Third, act now to safeguard financial stability, particularly as we see rising financial sector risks. Macroprudential policies need to be even more vigilant and proactively address pockets of vulnerability,” Georgieva said.

    “In this environment, we also must support vulnerable emerging markets and developing countries. It is tough for everybody, but it is even tougher for countries that are now being hit by a stronger dollar, high borrowing costs, and capital outflows a triple blow that is particularly heavy for countries that are under a high level of debt,” she said.

    “We are focusing on debt this week, especially for low-income countries where over 60 per cent are at or near debt distress. We need stronger efforts to confront food insecurity 345 million people are acutely food insecure. Children, women, and men are at risk of dying because of hunger, said the managing director, ” she said.

    “We need transformational reforms to address climate change, to make digitalisation work for people, and to address inequality. To confront these issues, we must act with sense of urgency now, and we must act together,” Georgieva said.

    WASHINGTON: The International Monetary Fund on Thursday urged policymakers across the world to act now to bring down inflation, put in place responsible fiscal policy, safeguard financial stability and carry reforms to address climate change, make digitalisation work for people and address inequality.

    Speaking to reporters at a press conference here, IMF Managing Director Kristalina Georgieva said, “The IMF is working with our 190 members on these issues. Our economic analysis is front and centre to help countries navigate this complex environment and avoid policy mistakes.”

    Describing it as a difficult global environment, Georgieva said the world economy has been hit by one shock after another- the coronavirus pandemic, Russia’s invasion of Ukraine and climate disasters on every continent.

    They continue to harm people’s lives and they have caused a cost-of-living crisis, she noted.

    “The immediate toll is clear. On Tuesday, we cut our global growth forecast to 2.7 per cent in 2023. Across many economies, the risks of recession are rising. And even when growth is positive, for many people, it will feel like a recession because of rising prices and shrinking real incomes,” she said.

    On top of this, risks to financial stability are growing and uncertainty remains exceptionally high.

    “Our World Economic Outlook shows a one-in-four chance that global growth could drop to a historic low of 2 per cent next year,” she said.

    “These repeated shocks and growth setbacks raise a bigger question: are we experiencing a fundamental economic shift in the world economy from a world of relative predictability and stability, to greater uncertainty and volatility,” she said.

    Georgieva said the IMF sees very clear areas where they can do better, even in this more complex environment.

    “First, bring inflation down. We know that rising interest rates come at a cost to growth. But we also know that not tightening enough to put a leash on inflation would mean interest rates staying higher for longer, resulting in even more harm to growth and people. For central banks, this means taking decisive action when necessary, and communicating as clearly as they can,” she said.

    Second, act now to put in place responsible fiscal policy.

    “We must prioritise protecting vulnerable households and businesses. But we have to do that at a time when fiscal buffers are exhausted because of the pandemic and levels of debt are very high. The obvious conclusion is that policy measures need to be temporary and well-targeted. Steer away from across-the-board fiscal support that is neither effective nor affordable,” she said.

    “If we are to help people and fight inflation, we must ensure that fiscal and monetary policies go hand in hand. When monetary policy hits the brakes, fiscal policy should not step on the accelerator that would make for a very dangerous ride,” she said.

    “Third, act now to safeguard financial stability, particularly as we see rising financial sector risks. Macroprudential policies need to be even more vigilant and proactively address pockets of vulnerability,” Georgieva said.

    “In this environment, we also must support vulnerable emerging markets and developing countries. It is tough for everybody, but it is even tougher for countries that are now being hit by a stronger dollar, high borrowing costs, and capital outflows a triple blow that is particularly heavy for countries that are under a high level of debt,” she said.

    “We are focusing on debt this week, especially for low-income countries where over 60 per cent are at or near debt distress. We need stronger efforts to confront food insecurity 345 million people are acutely food insecure. Children, women, and men are at risk of dying because of hunger, said the managing director, ” she said.

    “We need transformational reforms to address climate change, to make digitalisation work for people, and to address inequality. To confront these issues, we must act with sense of urgency now, and we must act together,” Georgieva said.

  • Former CEA K Subramanian appointed Executive Director (India) at IMF 

    By PTI

    NEW DELHI: Former Chief Economic Adviser Krishnamurthy Subramanian has been appointed as Executive Director (ED) at the International Monetary Fund, a Personnel Ministry order said on Thursday.

    Subramanian is currently Professor (Finance), Indian School of Business.

    The Appointments Committee of the Cabinet has approved the appointment of Subramanian to the post of Executive Director (India) at the IMF, with effect from November 1, 2022 for a period of three years or until further orders, by curtailing the tenure of Dr Surjit S Bhalla as ED (India), IMF up to October 31, 2022, it said.

    Bhalla was appointed to the post for three years in October 2019.

    According to sources, the EDs are elected for a period of two years through voting by the Governors representing the respective constituency countries.

    The next two-year term of the EDs will start from November 1, 2022, for which the nominations have to be made within August 29, 2022 and the voting will happen on October 14, 2022.

    Bhalla joined the IMF Executive Board on November 9, 2019, after his election by the constituency countries in that electoral cycle.

    He was re-elected in the next electoral cycle for the 2-year period from 01.11.2020 to 31.10.2022, leaving only nine days of the remaining term as per the GOI’s order, sources said.

    As getting India’s nominee elected for a period of 9 days only and thereafter causing a bye-election for the new incumbent would have been impractical, the term of Bhalla has been aligned with the electoral cycle of the IMF, ie, upto October 31, 2022 by curtailing the term by 9 days, sources added.

    Subramanian, who completed his three-year tenure as CEA in 2021, would be nominated by India for election by the constituency Governors as per electoral cycle for the term starting from November 1, 2022.

    The Executive Board of the International Monetary Fund (IMF) is composed of 24 Directors (called Executive Director or ED), who are elected by member countries or by groups of countries.

    Seven of the EDs represent single-country constituencies whereas 17 EDs represent multi-country constituencies.

    India is in a four-country constituency having India, Bangladesh, Sri Lanka and Bhutan as members.

    NEW DELHI: Former Chief Economic Adviser Krishnamurthy Subramanian has been appointed as Executive Director (ED) at the International Monetary Fund, a Personnel Ministry order said on Thursday.

    Subramanian is currently Professor (Finance), Indian School of Business.

    The Appointments Committee of the Cabinet has approved the appointment of Subramanian to the post of Executive Director (India) at the IMF, with effect from November 1, 2022 for a period of three years or until further orders, by curtailing the tenure of Dr Surjit S Bhalla as ED (India), IMF up to October 31, 2022, it said.

    Bhalla was appointed to the post for three years in October 2019.

    According to sources, the EDs are elected for a period of two years through voting by the Governors representing the respective constituency countries.

    The next two-year term of the EDs will start from November 1, 2022, for which the nominations have to be made within August 29, 2022 and the voting will happen on October 14, 2022.

    Bhalla joined the IMF Executive Board on November 9, 2019, after his election by the constituency countries in that electoral cycle.

    He was re-elected in the next electoral cycle for the 2-year period from 01.11.2020 to 31.10.2022, leaving only nine days of the remaining term as per the GOI’s order, sources said.

    As getting India’s nominee elected for a period of 9 days only and thereafter causing a bye-election for the new incumbent would have been impractical, the term of Bhalla has been aligned with the electoral cycle of the IMF, ie, upto October 31, 2022 by curtailing the term by 9 days, sources added.

    Subramanian, who completed his three-year tenure as CEA in 2021, would be nominated by India for election by the constituency Governors as per electoral cycle for the term starting from November 1, 2022.

    The Executive Board of the International Monetary Fund (IMF) is composed of 24 Directors (called Executive Director or ED), who are elected by member countries or by groups of countries.

    Seven of the EDs represent single-country constituencies whereas 17 EDs represent multi-country constituencies.

    India is in a four-country constituency having India, Bangladesh, Sri Lanka and Bhutan as members.

  • Gita Gopinath becomes first woman and 2nd Indian to feature on IMF’s ‘wall of former chief economists’

    By PTI

    NEW DELHI: India-born Gita Gopinath became the first woman and second Indian to feature on the ‘wall of former chief economists’ of the International Monetary Fund (IMF).

    The first Indian to achieve the honour was Raghuram Rajan who was Chief Economist and Director of Research of IMF between 2003 and 2006.

    Gopinath was appointed as IMF Chief Economist in October 2018 and was later promoted as the IMF’s First Deputy Managing Director in December last year.

    “Breaking the trend I joined the wall of former Chief Economists of the IMF,” she said in a tweet, which also displayed the wall of former chief economists with her photograph.

    Gopinath had served as the first female chief economist of the Washington-based global lender for three years.

    Gopinath’s research has been published in many top economics journals.

    Prior to her appointment as IMF Chief Economist, she was the John Zwaanstra Professor of International Studies and Economics in the economics department of Harvard University.

    Before joining the faculty of Harvard University in 2005, she was an assistant professor of economics at the University of Chicago’s Booth School of Business.

  • India at forefront in fighting COVID-19, stands out in terms of vaccine policy: Gita Gopinath

    By PTI
    UNITED NATIONS: India has been at the forefront in fighting the coronavirus pandemic and “really stands out” in terms of its vaccine policy, Chief Economist of the IMF Gita Gopinath said on Monday, as she hailed the country for playing a very important role during the crisis by manufacturing and shipping the COVID-19 vaccines to several nations.

    Gopinath made the comments in an interactive session during the Inaugural Dr. Hansa Mehta Lecture organised on occasion of International Women’s Day.

    “I also want to mention that India really stands out in terms of its vaccine policy. If you look at where exactly is one manufacturing hub for vaccines in the world – that will be India,” Gopinath said.

    Gopinath lauded the Serum Institute of India, saying it produces the most number of vaccines in the world in a regular year and has been manufacturing the COVID-19 vaccine doses that are delivered to COVAX and then distributed to countries around the world.

    “India has been at the forefront in fighting this pandemic,” she said, noting that India has been providing vaccines through grants to several of its neighbour countries, including Bangladesh, Nepal and Myanmar, and through commercial arrangements as well.

    The country has been playing a very important role in helping the world in the global health crisis through its vaccination policies, she said.

    Gopinath was responding to a question on India, which is a vaccine hub of the world, and the role the country can play in contributing to global economic recovery.

    Gopinath pointed out that India makes up about 7 per cent of world GDP based on purchasing power parity terms.

    “So when you’re that large, what happens in India has implications for many other countries in the world, especially countries in the region,” she said.

    Noting that India was “hit very hard” by this pandemic, Gopinath said the country, which typically grows at over 6 per cent, recorded a growth of negative 8 per cent in 2020.

    “So it was very hard hit but you do see the recovery coming back as the country has reopened, activities returning,” she said.

    The International Monetary Fund (IMF) has projected an impressive 11.5 per cent growth rate for India in 2021, making the country the only major economy of the world to register a double-digit growth this year amidst the coronavirus pandemic.

    “Now because of its size, when you have India growing, it increases demand for goods from other parts of the world and that’s a big positive,” she said.

    Gopinath gave the keynote address at the Inaugural Dr. Hansa Mehta Lecture.

    The lecture, named in the memory of the pioneering Indian reformer and educator, was organised virtually by India’s Permanent Mission to the UN and The United Nations Academic Impact.

    Mehta had served as the Indian delegate to the UN Commission on Human Rights from 1947 to 1948 and is widely known for ensuring a more gender sensitive language in the landmark Universal Declaration of Human Rights, the UDHR.

    She is credited with making a significant change in the language of Article 1 of the UDHR, by replacing the phrase “All men are born free and equal” to “All human beings are born free and equal.”

    Speaking at the lecture, Assistant-Secretary-General & Deputy Executive Director of UN Women Anita Bhatia described Mehta as an exceptional leader who was willing to take personal and professional risks, had the ability to speak truth to power, had the courage of her convictions and “most importantly, someone who had a simple and yet very powerful belief in the need for social, economic, and political justice for women.”

    Bhatia said she would tell Mehta today that there have been huge improvements in many areas of gender equality since her time.

    Mehta would be astonished to learn that in many parts of the world there are now more women than men in higher education, she would be pleased at the improvements in educational opportunities and be very happy to know about the improvements in maternal mortality, in health outcomes for women generally, Bhatia said.

    Bhatia said Mehta would be astonished to learn “how far we have to go” given that 25 per cent of parliamentarians in the world only are women, only 14 countries in the world have gender equal cabinets, less than 10 per cent of heads of state are women and less than 10 per cent of heads of government are women.

    “As we think ahead to what International Women’s Day symbolises and how we can build back after the crippling effects of the pandemic,” which have decimated women’s health, security, income, reducing female labour force participation, Bhatia said nations must commit to putting women at the center of efforts to build back better, paying attention to the child care burden, ensuring they really work towards the Sustainable Development Goal 5 by making women’s rights, gender equality and women’s empowerment a universal agenda for both men and boys and making gender, and women’s economic empowerment everybody’s business.

    “If we are to achieve gender equality and women’s economic empowerment, we need to do so not just with women in mind, but women in the room and women at the table,” Bhatia said.

    Under-Secretary-General Melissa Fleming, head of global communications for the United Nations, said Mehta built an enormously rich legacy during her life as a scholar, educator, feminist, social reformer and writer and is an “indispensable figure” to the history of the United Nations.

  • IMF projects 11.5 per cent growth rate for India in 2021, to be world’s fastest

    By Express News Service
    The International Monetary Fund (IMF) on Tuesday revised its India’s growth rate projection for 2021 to a decent 11.5% from 8.8% it had projected earlier on the back of the country’s “stronger than expected recovery”. It also improved its forecast for India’s current fiscal to 8% GDP contraction from 10.3% negative growth projected in its October World Economic Outlook report.

    According to the IMF, India is the only major economy in the world that can register a double-digit growth in 2021. China is next with 8.1% growth in 2021 followed by Spain (5.9%) and France (5.5%).The latest projections give India the tag of the fastest developing economy in the world. 

    The projections are also in line with the Centre’s assessment of a strong revival in the coming months, aided by the recent vaccine approvals. After a stupendous rebound in 2021, the IMF said India’s GDP growth is likely to slow in 2022 to 6.8%. 

    IMF Chief Economist Gita Gopinath said India seems to be having a faster pace of recovery than previously thought. “We are seeing India come back to its 2019 levels and 2021,” Gopinath said. She, however, noted that cumulatively by the end of 2022, India’s rate will be 9% below its pre-pandemic projected level.

    READ| Pandemic to slash USD 22 trillion off global GDP 2020-25: IMF

    The IMF said the global economy is projected to grow 5.5% in 2021 and 4.2% in 2022. “The 2021 forecast is revised up 0.3 percentage point relative to the previous forecast, reflecting expectations of a vaccine-powered strengthening of activity later in the year and additional policy support in a few large economies,” it added.

    The IMF, however, warned that delays in vaccine rollout, widespread hesitancy in inoculation, shorter-than anticipated immunity from the vaccines could be a downside risk to recovery. It adds that winding down of policy support before economic recovery could further hurt global growth. 

    5.5% growth for global economy

    Global economy is projected to grow at 5.5% in 2021 and 4.2% in 2022, reflecting expectations of a vaccine-powered strengthening of business activities, the IMF said

  • Pandemic to slash USD 22 trillion off global GDP 2020-25: IMF

    According to Gopinath, the upgrade for 2021 reflects the positive effects of the onset of vaccinations in some countries.

  • Agri laws can be a significant step: IMF

    By Express News Service
    NEW DELHI:  The International Monetary Fund (IMF) has said India’s new farm laws have the potential to represent a significant step ahead for agricultural reforms. It, however, added that the people who could be affected the most due to the transition to the new system should be adequately protected.

    “We believe the farm bills do have the potential to represent a significant step forward for agricultural reforms in India. The new measures will reduce the role of middlemen and increase efficiency,” director of communications at the IMF Gerry Rice said.

    “However, it is crucial that the social safety net adequately protects those who might be adversely impacted during the transition to this new system,” the IMF spokesperson said, adding this can be done by ensuring that the job market accommodates those that are impacted by the reforms.

    Upon being asked on how a social security net can be created for the persons who could be adversely affected, Rice said that this could be done by making sure that the job market accommodates such persons.The IMF comments on a day the ninth round of talks between the government and the farmers took place but failed to break the deadlock and days after the Supreme Court stayed the implementation of the three new agricluture laws and formed a four-committee to oversee the negotiations. 

    The farm protests had garnered international attention after Canadian Prime Minister Justin Trudeau had expressed concerns over the protests. India had reacted saying the matter was an “internal affair” and his comments were unwarranted and unnecessary. A group of 100 UK MPs had also written to UK Prime Minister Boris Johnson asking him to take up the matter with his Indian counterpart Narendra Modi. The farmers have threatened to hold a tractor rally on January 26.

  • Foreign exchange reserves again set a record, reached 560 billion dollars

    Under the leadership of Prime Minister Narendra Modi, the country’s economy is growing rapidly. The foreign exchange reserves have once again set a record due to the policies of the Modi government. The country’s foreign exchange reserves increased by $ 5.412 billion to $ 560.532 billion for the week ended October 23. This is the highest level ever. According to the latest data of the Reserve Bank, the significant share of foreign exchange reserves during this period, ie, foreign currency assets increased by $ 5.202 billion to reach $ 517.524 billion. Gold reserves rose by $ 175 million this week to $ 36.860 billion. Foreign exchange reserves crossed the $ 500 billion mark for the first time in the week ending June 5, 2020. Earlier, on September 8, 2017, it crossed the $ 400 billion mark for the first time. Whereas the foreign exchange reserves in 2014 were close to $ 311 billion during the UPA regime.
    The International Monetary Fund (IMF) in its latest report on the ‘world economic scenario’ has said that India will overtake China next year. The IMF said that India’s economy is expected to decline in the current financial year due to Corona, but the economy will be able to make a quantum leap in the next financial year. The International Monetary Fund has said that the Indian economy is expected to register a strong growth of 8.8 percent in 2021 and will regain the status of the fastest growing emerging economy, overtaking China. China is projected to achieve 8.2 percent growth in 2021.