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India must take 'urgent' action to reverse economic slowdown, says IMF
1 min read.Updated: 24 Dec 2019, 08:43 AM ISTAFP
IMF chief economist Gita Gopinath last week said India's slowdown had 'surprised to the downside'
IMF in October slashed its forecast for 2019 by nearly a full point to 6.1%
India's government must take steps quickly to reverse the economic slowdown of an economy that has been one of the engines of global growth, the International Monetary Fund said Monday.
Declining consumption and investment, and falling tax revenue, have combined with other factors to put the brakes on one of the fastest growing economies in the world, the IMF said in its annual review.
After lifting millions out of poverty "India is now in the midst of a significant economic slowdown," Ranil Salgado, of the IMF Asia and Pacific Department, told reporters.
"Addressing the current downturn and returning India to a high growth path requires urgent policy actions."
However, the government has limited space to boost spending to support growth, especially given high debt levels and interest payments, the fund warned
IMF chief economist Gita Gopinath last week said India's slowdown had "surprised to the downside," and said the fund is set to significantly downgrade its growth estimates for the Indian economy in the World Economic Outlook which will be released next month.
The IMF in October slashed its forecast for 2019 by nearly a full point to 6.1 percent, while cutting the outlook for 2020 to 7.0 percent.
Salgado said India's central bank has "room to cut the policy rate further, especially if the economic slowdown continues."