Published: Tue, January 21, 2020
Markets | By Otis Pena

India 'biggest contributor' to downward revision in global growth: IMF's Gita Gopinath

India 'biggest contributor' to downward revision in global growth: IMF's Gita Gopinath

"After a synchronised slowdown in 2019, we expect a moderate pick-up in global growth this year and next", IMF Managing Director Kristalina Georgieva said at a press conference on Monday. Both figures are down compared with forecasts in October, and it marks the IMF's sixth straight reduction for 2019.

In its report on Nigeria, it said, "Growth in Nigeria is expected to remain subdued".

Update and has revised lower its projections for global growth as well as for emerging and developing Asia, and ASEAN-5 which includes the Philippines, Indonesia, Malaysia, Thailand and Vietnam.

Eurozone growth also was marked down 0.1 percentage point from October, to 1.3 percent for 2020, largely due to a manufacturing contraction in Germany and decelerating domestic demand in Spain. It said growth in 2019 and 2020 would be 0.5 percentage point weaker without their stimulus push.

Speaking at a press conference here on the WEO update, Gopinath said that a new global taxation regime is needed for digital economy to check tax evasion.

Also, the global lender stated that Insecurity, conflicts, insurgencies and food security would weigh on economic activities of several economies like Burkina Faso, Chad, Ethiopia, Mali, Niger, and Nigeria.

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The worldwide financial watchdog earlier estimated the recent trade rows had already cost the world economy about $700 billion or an 0.8 percent slump in global GDP, outlining the data in a soon-to-be-published annual report by the IMF.

India's economy grew just 4.5 per cent in July-September 2019 period -- the weakest pace in almost six years.

While risks have eased, the International Monetary Fund was clear that that there's still plenty to worry about. Progress in trade talks is stop-start, simmering U.S. -Iran tensions could hit oil supply, and there's also social unrest and weather-related disasters.

"However, few signs of turning points are yet visible in global macroeconomic data", it noted. "The only sector that is showing some stability is services and even that is lower than expected", she said, adding that the government needs to take urgent measures to "quickly revive the engine".

Growth will improve slightly to 3.4 percent in 2021, but that estimate, too, was cut by 0.2 percentage point from October, said the Washington-based worldwide crisis lender. Besides, there is a broad-based shift toward accommodative monetary policy, intermittent favorable news on US-China trade negotiations, and diminished fears of a no-deal Brexit, leading to some retreat from the risk-off environment that had set in at the time of the October WEO.

"A trade truce is not the same as trade peace", Georgieva said. Completion of the first phase of the deal mean a "shrinkage of the negative impact, but not an eradication".

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