Slowdown in India temporary, momentum to improve ahead: IMF Chief

IMF chief Kristalina Georgieva has said that growth slowdown in India is temporary and that the momentum is going to improve going ahead.

Speaking at the WEF 2020, she also said the world appears a better place in January 2020 compared to what it was when IMF announced its World Economic Outlook in October 2019.

She said the factors driving this positive momentum include receding trade tension after the US-China first phase trade deal and synchronised tax cuts, among others.

She, however, said that the present growth rate of 3.3 per cent is not fantastic for the world economy.

"It is still sluggish growth. We want fiscal policies to be more aggressive and we want structural reforms and more dynamism," the managing director of the International Monetary Fund (IMF) said.

On emerging markets, she said they are also moving forward.

“We had a downgrade in one large market, which is India but we believe that’s temporary. We expect momentum to improve further going ahead. There are also some bright spots like Indonesia and Vietnam,” she noted.

She further said a number of African countries are doing very well, but some other nations like Mexico are not.

The IMF chief listed factors like weakness in long-term productivity growth and low inflation as some of the risks ahead for the global economy. 

"We are living in a more risk-prone world. It is only January and there have been events that are sparking risks for the global economy," she added.