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IMF chief: India bright spot amid global slowdown
03 Oct '15
2 min read
Ahead of the IMF-World Bank Annual Meetings next week in the Peruvian capital Lima, IMF Managing Director Christine Lagarde has said that India remains a bright spot amid a global slowdown.
Speaking at a function in Washington called "A Conversation with Christine Lagarde", hosted by Council of the Americas, she said global growth will likely be weaker this year than last, with only a modest acceleration expected in 2016.
“China is slowing down as it rebalances away from export-led growth. Countries such as Russia and Brazil are facing serious economic difficulties. Growth in Latin American countries, in general, continues to slow sharply. We are also seeing weaker activity in low-income countries – which will be increasingly affected by the worsening external environment,” Lagarde said in her speech.
The IMF chief said that at the global level, there is still a drag on the economy because financial stability is not yet assured. Despite progress in recent years, financial sector weaknesses remain in many countries, and financial risks are now elevated in emerging markets.
“If we put all this together, we see global growth that is disappointing and uneven. In addition, medium-term growth prospects have become weaker. The “new mediocre” of which I warned exactly a year ago – the risk of low growth for a long time – looms closer,” Lagarde said.
She also voiced her concern on the economic front. “The prospect of rising interest rates in the US and China's slowdown are contributing to uncertainty and higher market volatility. There has been a sharp deceleration in the growth of global trade. And the rapid drop in commodity prices is posing problems for resource-based economies.
“Besides the heartbreaking suffering from conflict and forced migration, there is a human toll from economic dislocation and low activity: more than 200 million people are unemployed worldwide; income and wealth inequality keep on rising; and women continue to be disadvantaged both in pay and labor market opportunities,” she said. (SH)
Speaking at a function in Washington called "A Conversation with Christine Lagarde", hosted by Council of the Americas, she said global growth will likely be weaker this year than last, with only a modest acceleration expected in 2016.
“China is slowing down as it rebalances away from export-led growth. Countries such as Russia and Brazil are facing serious economic difficulties. Growth in Latin American countries, in general, continues to slow sharply. We are also seeing weaker activity in low-income countries – which will be increasingly affected by the worsening external environment,” Lagarde said in her speech.
The IMF chief said that at the global level, there is still a drag on the economy because financial stability is not yet assured. Despite progress in recent years, financial sector weaknesses remain in many countries, and financial risks are now elevated in emerging markets.
“If we put all this together, we see global growth that is disappointing and uneven. In addition, medium-term growth prospects have become weaker. The “new mediocre” of which I warned exactly a year ago – the risk of low growth for a long time – looms closer,” Lagarde said.
She also voiced her concern on the economic front. “The prospect of rising interest rates in the US and China's slowdown are contributing to uncertainty and higher market volatility. There has been a sharp deceleration in the growth of global trade. And the rapid drop in commodity prices is posing problems for resource-based economies.
“Besides the heartbreaking suffering from conflict and forced migration, there is a human toll from economic dislocation and low activity: more than 200 million people are unemployed worldwide; income and wealth inequality keep on rising; and women continue to be disadvantaged both in pay and labor market opportunities,” she said. (SH)
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