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IMF-World Bank ends meetings with call to brace for risks

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Indonesia: Global financial leaders wrapped up an annual meeting of the International Monetary Fund and World Bank on Saturday by urging countries to brace for potential risks from trade disputes and other tensions.

The meetings in Bali, Indonesia, this week were overshadowed by a spate of financial market turmoil and by the threat to global growth from the trade clash between the U.S. and China over Beijing’s technology policies.

The International Monetary and Financial Committee, which advises the IMF’s board of governors, issued a communique on Saturday urging countries to keep debt under control, engineer policies ensure credit is available in line with their levels of inflation and ensure sustained economic growth “for the benefit of all.”

 

IMF members also pledged to avoid devaluing currencies to seek a trade advantage by making a country’s exports relatively cheaper.

IMF Managing Director Christine Lagarde said that while global growth is still strong, it has leveled off. The IMF started the meetings in Bali by downgrading its 2018 estimate for global growth to a still robust 3.7 percent from an earlier forecast of 3.9 percent.

 

“I think it’s not inconsistent to have a plateaued growth and downside risks that are the clouds on the horizon, some of which have begun to open up,” Lagard said. Adding that given the level of debt around the world, “we’ve given strong recommendations and in terms of trade: de-escalate and please dialogue.”

 

Countries should seek to ensure their levels of debt are manageable and that policies foster growth for all, she said. “Sail together and we will be stronger. Focus on your policies. Don’t drift and let’s cooperate as much as we can because we will be better off together.”

 

China’s central bank governor, Yi Gang, joined the chorus of consternation over the trade standoff, which has resulted in Washington imposing penalty tariffs on tens of billions of dollars of imports of Chinese products and Beijing responding in kind. Protectionism and trade tensions are “major risks” for the world economy, he said in a statement to fellow financial leaders.

 

U.S. Treasury Secretary Steven Mnuchin downplayed the level of alarm, saying he doesn’t lose sleep over the possibility that China might step up its sales of U.S. treasuries in retaliation for pressure from Washington to alter national economic strategies aimed at nurturing Chinese leaders in many advanced technologies.

 

Mnuchin said it was still not certain if President Donald Trump would meet with his Chinese counterpart Xi Jinping at a Group of 20 summit late next month in Buenos Aires. Reports that such a meeting was likely raised hopes for progress on the impasse between the world’s two largest economies, stilling disquiet on financial markets Friday.

 

“I don’t think any decision has been made in regards to a meeting,” he said, saying he favored one. “The president will decide.”

 

It’s unclear if the two sides can make enough progress before then given the limited room for maneuvering. Apart from chronic U.S. trade deficits, the policies Washington objects to are central to Beijing’s strategy for guiding the economy for decades to come.

 

Stepping up Chinese imports of U.S. goods and commodities such as liquefied natural gas won’t cut it, Mnuchin said.

 

It’s “about structural issues,” he said. “This is not about buying more soybeans and buying more LNG.”

 

“There have to be meaningful commitments to create a rebalanced trading relationship,” he said.

 

Yi, the head of China’s central bank, said China “stands ready” to cooperate with everyone to support freer trade and investment.

 

“Countries should jointly take measures against trade protectionism and strive to make economic globalization more open, inclusive, balanced and beneficial to all,” he said.


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India one of world’s fastest growing large economies:IMF

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Washington: India has been one of the fastest growing large economies in the world, the International Monetary Fund (IMF) has said, asserting that the country has carried out several key reforms in the last five years, but more needs to be done.
Responding to a question on India’s economic development in the last five years at a fortnightly news conference here, IMF communications director Gerry Rice Thursday said, “India has of course been one of the world’s fastest growing large economies of late, with growth averaging about seven per cent over the past five years.”
“Important reforms have been implemented and we feel more reforms are needed to sustain this high growth, including to harness the demographic dividend opportunity, which India has,” he said.
Details about the Indian economy would be revealed in the upcoming World Economic Outlook (WEO) survey report to be released by the IMF ahead of the annual spring meeting with the World Bank next month, he said.
This report would be the first under Indian American economist Gita Gopinath, who is now IMF’s chief economist.
“The WEO will go into more details. But amongst the policy priorities, we would include accelerate the cleanup of banks and corporate balance sheets, continue fiscal consolidation, both at centre and state levels, and broadly maintain the reform momentum in terms of structural reforms in factor markets, labour, land reforms and further enhancing the business climate to achieve faster and more inclusive growth,” Rice said.

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Fitch cuts India GDP growth forecast for FY20 to 6.8 pc

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New Delhi: Fitch Ratings on Friday cut India’s economic growth forecast for the next financial year starting April 1, to 6.8 per cent from its previous estimate of 7 per cent, on weaker than expected momentum in the economy.
“While we have cut our growth forecasts for the next fiscal year (FY20, ending in March 2020) on weaker-than-expected momentum, we still see Indian GDP growth to hold up reasonably well, at 6.8 per cent, followed by 7.1 per cent in FY21,” Fitch said in its Global Economic Outlook. Fitch Ratings cut India’s FY19 GDP growth forecast to 7.2 per cent from 7.8 per cent on December 6.
The rating agency has also cut growth forecasts for FY20 and FY21 to 7 per cent from 7.3 per cent and 7.1 per cent from 7.3 per cent, respectively. According to Fitch, the RBI has adopted a more dovish monetary policy stance and cut interest rates by 0.25 percentage at its February 2019 meeting, a move supported by steadily decelerating headline inflation.
“We have changed our rate outlook and we now expect another 25 bp cut in 2019, amid protracted below target inflation and easier global monetary conditions than previously envisaged,” it said. “On the fiscal side, the budget for FY20 plans to increase cash transfers for farmers,” it added. Fitch said, it’s benign oil price outlook and expectations of accelerating food prices in the coming months should support rural households’ income and consumption.

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India’s total wireless subscribers grew to 1.18 bn in January 2019: TRAI

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New Delhi: India’s total wireless subscribers grew by 0.51 percent to 1,181.97 million (1.18 bn) in January 2019, as per a report by telecom regularor TRAI.
Total wireless subscribers (GSM, CDMA & LTE) increased from 1,176.00 million at the end of December 2018 to 1,181.97 million at the end of January 2019, thereby registering a monthly growth rate of 0.51 percent, the TRAI report said.
As on January 31, 2019, the private access service providers held 89.95 percent market share of the wireless subscribers whereas BSNL and MTNL, the two PSU access service providers, had a market share of only 10.05%, the regulator said in its report.
The Wireless subscription in urban areas increased from 647.52 million at the end of December 2018 to 654.20 million at the end of January 2019, however wireless subscriptions in rural areas declined from 528.48 million to 527.77 million during the month.
The monthly growth rates of urban wireless subscription was1.03 percent and rural wireless subscription was 0.13%, the report said
The Wireless Tele-density in India increased from 89.78 at the end of December 2018 to 90.15 at the end of January 2019.
The Urban Wireless Tele-density increased from 155.48 at the end of December 2018 to 156.85 at the end of January 2019, however Rural Wireless Tele-density declined from 59.15 to 59.04 during the same period.
The share of urban and rural wireless subscribers in total number of wireless subscribers was 55.35 percent and 44.65 percent respectively at the end of January 2019.

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