International Monetary Fund (IMF) chief Kristalina Georgieva has said that the largest emerging market economies like India are facing an even more pronounced effect of the global downturn. She also warned that the global economy is now witnessing synchronized slowdown which will result in slower growth for 90 percent of the world in 2019.
The IMF chief further said that despite this overall deceleration, about 40 emerging markets and developing economies, including 19 in sub-Saharan Africa, will have real GDP growth rates above 5 percent. In the United States and Germany, she said unemployment is at historic lows. She also said yet across advanced economies, including in the US, Japan and especially the euro area, there is a softening of economic activity. In China, she said growth is gradually coming down from the rapid pace it saw for many years.
Georgieva has stated that now is the time for countries with room in their budgets to deploy-or get ready to deploy-fiscal firepower. She also felt that low interest rates may give some policymakers additional money to spend. Referring to a new IMF research, which shows how structural reforms can raise productivity and generate enormous economic gains, she said these changes are the key to achieving higher growth over the medium and long-term. She pointed out that the right reforms in the right sequence could double the speed at which emerging markets and developing economies reach the living standards of the advanced economies.