Tag: International Monetary Fund

  • 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.

  • Desperate need for UN, World Bank, IMF to be more transparent, representative: Nirmala Sitharaman

    By PTI

    BOSTON: Institutions such as United Nations, World Bank and International Monetary Fund need to be urgently reformed as they no longer speak for countries whose issues have remained unattended to for decades, Finance Minister Nirmala Sitharaman said.

    All these organizations will have to look at reforming themselves, she said here at Harvard Kennedy School on Tuesday.

    During the conversation with Professor at Harvard University Lawrence Summers at the talk organized by the Mossavar-Rahmani Center for Business and Government, Sitharaman said “while reforms in countries are happening in different stages, these global institutions have remained the way they have been for the last several decades”.

    Many of them now no longer speak for countries whose issues have remained unattended to for decades together, whether it is on trade, security, monetary framework and on funding development, she stated.

    ALSO READ | Nirmala Sitharaman discusses investment opportunities, reforms in India with corporate leaders in US

    “There is a desperate need for all these institutions to be more transparent, represent and speak for countries which don’t get adequate representation; and therefore I would think that is something which has to happen immediately.”

    When these institutions become more representative, she said there would be more equitable distribution of resources, more concern for equitable development for growth.

    “This whole dialogue which used to happen – north-south – looked as if it’s moving towards irrelevance.”

    “But the issues of north-south still remain. Development has not reached many parts of Africa, many parts of the small Pacific islands. Many parts of those countries, even within countries, where there is differentiated development. So I think that’s what would have happened if only this reform agenda had been taken up by these institutions,” she said.

    Sitharaman arrived in the US Monday for a week-long trip to attend the annual meet of the World Bank and IMF in Washingon as well as G20 Finance Ministers and Central Bank Governors (FMCBG) meeting.

    During the official visit to the US, Sitharaman is expected to meet US Treasury Secretary Janet Yellen.

    She said that participating in the G-20 now for India has got its own importance.

    India has joined the trio, which refers to the Chair of the G-20, and the one before and the Chair after the current President.

    India will hold the G20 presidency from December 1, 2022, and Sitharaman said that whole year, “India will work to take the G-20s agenda forward.”

    She said the G20 meeting for her will be also a process of learning how the current presidency is taking the agenda forward.

    “More importantly, the OECD has been working in the much discussed global tax or tax on these huge big multinationals so that this practice which is now prevalent that they end up paying tax nowhere.”

    “They’re neither paying the country where they’re doing business and earning the profit, nor are they paying tax in the country where they are located,” she said, adding that the current “each country for itself’ taxation regime has given them an opportunity to end up paying nowhere, which is good for the company, but absolutely of no use for countries where the business is getting generated.”

    “Today, more than 134 countries have come together to have a global tax on all those companies which are operating across nations, making the profit across nations profits in so many geographical jurisdictions, but end up paying no tax in both jurisdictions.”