India can bring countries together, Kristalina Georgieva, Managing Director of International Monetary Fund said on Wednesday. Further she highlighted that India can contribute more than 15 per cent in global growth.
“Look behind the headline numbers and we see emerging market and developing economies providing much of the momentum. We expect them to account for about four-fifths of global growth this year, with India alone expected to contribute more than 15 per cent. But beyond its role as a global growth engine, India is uniquely positioned to bring countries together,” Georgieva said in a blog on the eve of G20 Finance Minister and Central Bank Governor meeting (FMCBG) scheduled to take place this week in Bengaluru.
Growth forecast
IMF has projected growth rate 6.8 per cent for current fiscal (FY23). Though it is likely to slow to 6.1 per cent in FY24, but expected to pick up to 6.8 per cent in FY25. IMF has repeatedly said that India is bright spot. “At a time of heightened uncertainties for the global economy, India’s strong performance remains a bright spot. So, it’s fitting that Group of Twenty finance ministers and central bank governors will gather in Bengaluru this week,” she said in the blog titled ‘Policy Priorities for the G20: One Earth, One Family, One Future’
To achieve these, she emphasised on finding common ground even as geopolitical tensions are rising. And there is need to steer clear of zero-sum policies that would only leave the world poorer and less secure. She reminded what Nobel Laureate Rabindranath Tagore once said: “You can’t cross the sea merely by standing and staring at the water.”
“For G20 policymakers, this means having the courage to take the right actions, steering the ship we are all on to safe harbour,” she urged.
Digital mechanism
Highlighting, India’s progress in digital mechanism, she said its unified Payments Interface is an excellent example of technology boosting financial inclusion. Last month alone, this layer of India’s digital public infrastructure processed over 8 billion transactions. And that system allows 400 million people in rural areas to participate with legacy ‘push-button’ cellphones. “This is just the beginning,” she said, adding that India has conducted an in-depth assessment of CBDCs (Central bank Digital Currency), which could inform similar studies elsewhere, accelerating digital progress worldwide.
Talking about global economic scenario post pandemic, she said that about 15 per cent of low-income countries are in debt distress and an additional 45 per cent are at high risk of debt distress. And among emerging economies, about 25 percent are at high risk and facing ‘default-like’ borrowing spreads.
Further she informed that to accelerate debt restructuring efforts, the IMF, World Bank, and India’s G20 presidency are convening a new Global Sovereign Debt Roundtable. “This week in Bengaluru, we will meet in‑person for the first time —and pave the way for creditors, both public and private, and debtor countries to work together, assess the existing shortcomings and best ways to tackle them,” she said.