As the global economy witnesses “synchronized slowdown”, the effect is “more pronounced” in some of the largest emerging market economies like India, claims the IMF (International Monetary Fund) Managing Director Kristalina Georgieva.
Ms. Georgieva has pointed out that the widespread deceleration indicates that the growth in the fiscal year 2019-20 will fall to its “lowest rate” since the starting of the decade. Around 90 percent of the world is likely to go through slower growth, said the IMF Managing Director.
In her first speech as the IMF Managing Director, Ms. Georgieva was quoted saying, “Two years ago, the global economy was in a synchronized upswing. Measured by GDP, nearly 75 percent of the world was accelerating. The global economy is now in a synchronized slowdown. In 2019, we expect slower growth in nearly 90 percent of the world.”
She continued, “In the United States and Germany, unemployment is at historic lows. Yet across advanced economies, including in the US, 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.”
Ms. Georgieva continued that global trade growth has come to a “near standstill”.
The International Monetary Fund has cut its projection for the economic growth of India by 0.3 percent points to 7 percent for the financial year 2019-20 outstanding to the “weaker-than-expected outlook” for the domestic need.
In October, Kristalina Georgieva has taken over the charges at the IMF from former IMF Managing Director Christine Lagarde, claims that currencies are once again in the limelight and disputes extend between multiple nations and into other critical issues.
She further said that “even if growth picks-up in 2020, the current rifts could lead to changes that last a generation – broken supply chains, siloed trade sectors, a ‘digital Berlin Wall’ that forces countries to choose between technology systems.”
Amid rising trade war between the nations that are generally fought through tariffs and counter-tariffs, the Chief called for countries to work together and said that “everyone loses in a trade war”.