The IMF today cut India’s growth rate for the current fiscal year to 6.6 per cent from its previous estimate of 7.6 per cent due to the “temporary negative consumption shock” of demonetisation, days after the World Bank also decelerated India’s growth estimates.
“In India, the growth forecast for the current (2016–17) and next fiscal year were trimmed by one percentage point and 0.4 percentage point, respectively, primarily due to the temporary negative consumption shock induced by cash shortages and payment disruptions associated with the recent currency note withdrawal and exchange initiative,” the International Monetary Fund (IMF) said in its latest World Economic Outlook (WEO) update released today.
The IMF said that after a lacklustre outturn in 2016, economic activity is projected to pick up pace in 2017 and 2018, especially in emerging market and developing economies.
Economic activity in both advanced economies and emerging market and developing economies (EMDEs) is forecast to accelerate in 2017–18, with global growth projected to be 3.4 per cent and 3.6 per cent, respectively, again unchanged from the October forecasts, it said.
As per new IMF projections, India’s growth in 2016 is now estimated to be 6.6 per cent as against 7.6 per cent earlier forecast.
That’s the (screenshot of the) summary of the summary, in very brief.
So that is slow going, but at least its moving in the right direction, For now.
This report summarizes the reports from all regional research divisions, mainly at the Bank’s branches in Japan, and is based on data and other information gathered for the meeting of general managers of the Bank’s branches held today.
The annual consumer price inflation eased to 3.41 percent in December, its lowest level in more than two years, helped by a sharp cooling in food prices, government data showed on Thursday.
Economists had expected annual retail inflation to come in at 3.57 percent last month, compared with 3.63 percent in November. Food inflation was 1.37 percent last month, lower than a revised 2.03 percent in November.
Meanwhile, the industrial production grew by 5.7 per cent in November against contraction of 3.4 per cent same month last year.
Don’t anyone accuse Brazil’s central bank of not being bold.
In a unanimous decision, the bank cut its policy interest rate by 75 basis points on Wednesday, exceeding the consensus call for a 50bps cut and sharply picking up the pace on an easing cycle it began with two back-to-back cuts of 25bps each in October and November
In a statement, the bank said economic activity had fallen below expectations and that a recovery would take longer than previously anticipated.
It also noted data released earlier in the day showing inflation falling faster than expected to 6.3 per cent in the year to December 31 – the first time in two years it has been within the central bank’s target range of 4.5 per cent plus or minus 2 percentage points. Market economists expect it to end 2017 at 4.81 per cent, according to the central bank’s latest weekly survey.
The size of the cut will be welcomed by many, given the economy’s stubborn refusal to return to growth. The rebound expected by many when congress ditched president Dilma Rousseff last year has failed to happen. GDP contracted by 8 per cent over the past two years under Rousseff’s watch; her pro-growth, market-friendly successor, Michel Temer, was expected to turn things round quickly.