The chief economist of the International Monetary Fund (IMF), Gita Gopinath said that India was primarily responsible for the downgrade in global growth.
Speaking at the 50th annual meeting of the World Economic Forum in Davos, Switzerland, Gopinath blamed India’s economic slowdown for a ‘lion’s share’ of the 0.1 per cent cut in the global economic growth projections for last year to 2.9 per cent and to 3.3 per cent for the current year from those made in October, as reported by Moneylife.in.
The IMF also lowered India’s economic growth forecast to 4.8 per cent for this fiscal year due to the crisis in the non-banking financial sector and weak rural demand. The economist said that domestic demand has slowed more sharply in India than expected.
Gopinath also mentioned that India needs a lot of investment and it is important for the government to encourage it. It may be mentioned, India’s economic growth had decelerated to a six-and-a-half-year low of 4.5 per cent in the September quarter.
In reference to the government’s cold-shoulder to Amazon CEO Jeff Bezos during his India visit last week, she said, “We need to revive domestic investment in India, consumption spending is weak. So I think the environment has to be created for greater investment because that’s what will raise the capital stock and raise India’s potential growth.”
Meanwhile, senior Congress leader P Chidambaram has predicted a verbal attack on Gopinath after she spoke about the condition of the Indian economy.
“I suppose we must prepare ourselves for an attack by government ministers on the IMF and Dr Gita Gopinath,” Chidambaram wrote on microblogging site.
Photo credit: @GitaGopinath