India should take quick steps to reverse economic slowdown: IMF

The International Monetary Fund on Monday said that India’s government must take urgent and quick steps to reverse the economic slowdown.

In an annual review, the IMF said that declining consumption, investment and a slump in tax revenue have all combined to put the brakes on one of the fastest-growing economies in the world.

ALSO READ: RBI cuts GDP growth forecast to 5%, repo rate remains unchanged at 5.15%

International Monetary Fund’s (IMF) Chief Economist Gita Gopinath last week said that regulatory uncertainty has played a major role in the economic slowdown in India.”I believe, in the slowdown, regulatory uncertainty has played a role. That’s another factor that needs to be addressed. It is important for India to take up reforms but to be able to do this with greater clarity and greater certainty would help,” Gopinath said at industry chamber FICCI’s 92nd Annual Convention.

She also added that some high-frequency indicators are signalling that the economy may not revive anytime soon.

The IMF slashed India’s economic growth projection for 2019 to 6.1% but said that it might pick up to 7 % in 2020.

In July this year, the IMF had put India’s growth rate to 7% for the current fiscal owing to “weaker-than-expected outlook” for the domestic demand. In April, it had said that India will grow at 7.3 % in 2019. The Reserve Bank of India cut the gross domestic product (GDP) growth forecast for the current fiscal to 5% from 6.1%.

The central bank did leave the policy rate unchanged at 5.15%. Between February and October 2019, the RBI has reduced the repo rate by 135 basis points.

(With Agency Inputs)

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