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IMF blames India for ‘lion’s share’ of cut to global growth projection

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International Monetary Fund

United Nations, Jan 20 Drastically slashing India’s growth estimate to 4.8 per cent for the current fiscal year, the International Monetary Fund on Monday blamed its economic slowdown for a “lion’s share” of its cut of 0.1 per cent to global growth projections.

The International Monetary Fund’s World Economic Outlook (WEO) Update cut the global economic growth projections made in October by 0.1 per cent for last year to 2.9 per cent and to 3.3 per cent for the current year.

“A more subdued growth forecast for India accounts for the lion’s share of the downward revisions,” the IMF said.

The slashing of India’s growth projections follow downward trend from 7.5 per cent at this time last year to 6.1 per cent last October.

The WEO Update released in Davos, where the World Economic Forum is meeting, however, indicated that India may be turning around after what it had said was one of the “negative surprises.”

In the next fiscal year, India’s growth rate is expected to increase by 1 per cent to 5.8 per cent and to 6.5 in 2021-22.

Despite the cuts for India, it is the second-fastest growing major economy in the world after China this year and the next, and it is expected to overtake China in 2021.

China’s growth rate projections are 6.1 per cent for 2019, 6 per cent in 2020 and 5.8 per cent in 2021.

India is also doing better than the once-roaring Asian tigers of the ASEAN, whose economic growth was estimated at 4.7 last year and projected to increase to 4.8 this year and 5.1 per cent next year, the IMF said.

The growth rates of advanced economies are dismal in comparison, although given their level of development, the low growth will not have the same impact as the slowdown would have on an economy like India.

The developed countries are estimated to have grown at 1.7 per cent last year and projected to grow at 1.6 per cent this year and the next.

The IMF estimated growth rate of Germany last year at 0.5 per cent, the United States at 2.3 per cent, and Japan at 1 per cent.

Despite Brexit fears, Britain’s growth was estimated at 1.3 per cent last year, and projected to grow to 1.4 per cent this year and 1.5 per cent the next.

The IMF said the reason for the downgrade of India’s growth rates is that “domestic demand has slowed more sharply than expected amid stress in the non-bank financial sector and a decline in credit growth.”

The IMF gave India the lowest growth projections of the three made by international organisations this month — all of which downgraded it from previous estimates.

The World Bank estimated India’s growth rate to be 5 per cent for the current fiscal year, while the UN put it at 5.7 per cent.

The IMF said that globally, “trade policy uncertainty, geopolitical tensions, and idiosyncratic stress in key emerging market economies continued to weigh on global economic activity — especially manufacturing and trade — in the second half of 2019.”

It added, “Intensifying social unrest in several countries posed new challenges, as did weather-related disasters.”

Despite these, IMF said “Some indications emerged toward year-end that global growth may be bottoming out.”

At the same time, it cautioned, “Downside risks, however, remain prominent, including rising geopolitical tensions, notably between the United States and Iran, intensifying social unrest, further worsening of relations between the United States and its trading partners, and deepening economic frictions between other countries.”

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Sensex crashes 1,100 points; Rs 5 lakh crore gone in 5 minutes over Coronavirus

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Sensex down

Mumbai, Feb 28 The Indian stocks market crashed early on Friday, with the Sensex falling 1,100 points as coronavirus fears deepened.

At 9.50 a.m., the BSE Sensex was trading at 38,597.53, lower by 1,148.13 points or 2.89 per cent from the previous close of 39,745.66.

It had opened at the intra-day high of 39,087.47 and has so far touched a low of 38,587.51 points.

The Nifty50 on the National Stock Exchange was trading at 11,297.45, lower by 335.85 points or 2.89 per cent from its previous close.

Concerns of coronavirus turning into a pandemic and spreading into countries outside China have off late impacted investor sentiments both in the global and domestic markets.

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Vodafone Idea seeks Rs 35 per GB as minimum floor price

According to the source, Vodafone Idea wants minimum price of outgoing calls should be fixed at 6 paise per minute.

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Vodafone, Idea

New Delhi, Feb 27 : Vodafone Idea has sought fixing minimum tariffs for mobile data at Rs 35 per GB, which is about 7 time the current rate, and for calls at 6 paise per minute along with monthly charges from April 1, to help it pay statutory dues.

Struggling to clear adjusted gross revenue dues of Rs 53,000 crore to comply with a Supreme Court order, the loss-making telco has sought 18 years time to clear the dues, including a three-year moratorium on payment of interest and penalty, according to official sources.

In a letter to the Department of Telecommunications, the company said it wants minimum price of data should be fixed at Rs 35 per gigabyte and minimum monthly connection charge at Rs 50 from April 1, 2020. Current mobile internet prices are in the range of Rs 4-5 per GB.

According to the source, Vodafone Idea wants minimum price of outgoing calls should be fixed at 6 paise per minute.

The demand to raise call and internet rates from Vodafone Idea comes within three months of the company raising rates by up to 50 per cent.

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No impact of Delhi violence on investor confidence: Sitharaman

“But that shouldn’t cause worries, because FDI flows were steady and coming in good numbers while the forex is also doing very well,” she said.

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Nirmala Sitharaman

Guwahati, Feb 27: Claiming green shoots were visible in the Indian economy, Union Finance Minister Nirmala Sitharaman on Thursday denied any adverse impact on investor sentiments due to the Delhi violence and the ongoing anti-CAA protests in various parts of the country.

“The sentiments of foreign investors have not been dampened,” she told a media meet when asked whether investor confidence has taken a hit due to the agitation against the Citizenship (Amendment) Act and the violence in the national capital that has left at least 37 dead and over 200 injured.

Referring to her experiences at the recent Ministerial Conference on International Taxes in Riyadh, she said: “Nowhere was there a concern on something happening in India. On the contrary, there were very prominent investors who said they are now even open to open up a representation office in India, which they don’t have till now.”

The minister said she in fact saw lot of interest on India’s announcement of a national infrastructure pipeline.

“There is interest in India. It continues. And there is more interest in India for investors,” she said.

On whether the Indian companies were apprehensive of a raw material scarcity due to the coronavirus outbreak in China and elsewhere, Sitharaman said she held a meeting with 20-23 industries before leaving for Saudi Arabia, but none of them expressed any anxiety on that count.

“They didn’t express any anxiety about raw material supply, nor did they express any anxiety about exports being disturbed.

“However, of course, some of them felt after two months if the situation did not move, as regards containing the virus, they may start having problems of raw material availability, for which we are trying to see how best we can help them,” Sitharaman said.

To a query on the sluggish economy, the minister said following concrete steps by the government and the Reserve Bank of India, the mood was gradually turning positive.

“There are green shoots visible. Many of them are sustained, even if one or two are weakening. We are very clear that they will also revive,” she said, adding there were monthly ups and owns of some indicators.

“But that shouldn’t cause worries, because FDI flows were steady and coming in good numbers while the forex is also doing very well,” she said.

The minister conceded that there was inflationary pressure when due to climate change issues, prices of crops like onions went up.

“But now, India has lifted ban on exports of onion. That shows there is sufficient quantity of onions in the market, and indicates inflationary pressures are coming down,” said Sitharaman.

“The mood is gradually changing. There is every positive sign,” she said.

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