NEW DELHI: High frequency indicators are signalling that the economy may not revive anytime soon, International Monetary Fund’s (IMF) Chief Economist Gita Gopinath said on Friday.
She pointed out that business sentiment in 2014-15 was better than in 2019, and sectors dependent on government have taken a hit.
“Looking at high frequency indicators we are not seeing a revival soon,” Gopinath said at a FICCI event in New Delhi.
Earlier this week, Gopinath had said that IMF will revise estimates for India’s economic growth in January, which will be a significant downward cut over the previous estimate. IMF currently projects the country to grow at 6.1 per cent in 2019 and 7 per cent in 2020.
On Friday, the India-born economist expressed her concerns that there has been a decline in risk-taking appetite of banks, and concerns related to financial sector and non-banking finance companies (NBFCs) should be addressed first.
“Macroeconomic stability is very important for India including fiscal consolidation. Concerns related to growth in rural income should be addressed,” she stressed.
Gopinath said that while GST was very important for formalising the economy, important reforms related to land and labour were the need of the hour.
“There are important reforms needed with respect to land and labour. The economy needs reforms and it is important,” she said.
She also pointed out that manufacturing and services sector remained weak globally in 2019, while services was holding up across the globe currently.
“Possibly 2020 may see recovery globally or could be better than 2019 with some downside risk,” she hoped.
Source: Economic Times