IMF chief says India faces slowdown, but not recession

IMF chief says India faces slowdown, but not recession

Agency News

IMF Managing Director Kristalina Georgieva has made it clear that though the Indian economy experienced some abrupt slowdown in 2019, but it is not in a recession.

The economic slowdown is the result of turbulence in non-banking financial institutions and major reform measures such as GST and demonetization, she said on on the eve of Union Finance Minister Nirmala Sitharaman presenting the annual budget in Parliament on Saturday.

“The Indian economy indeed has experienced an abrupt slowdown in 2019. We had to revise our growth projections, downwards to four percent for last year. We are expecting 5.8 per cent (growth rate) in 2020 and then an upward trajectory to 6.5 percent in 2021,” Georgieva told a group of foreign journalists here on Friday.

“It appears that the main reason for this slowdown was the non-banking financial institutions experiencing turbulence,” she said. “For example, coming with the unified tax system, and the demonetisation that took place. These are steps that over time are beneficial, but of course they might, might be somewhat disruptive over short term,” Georgieva said in response to a question.