Latest news with #IMF
Economic Times
an hour ago
- Business
- Economic Times
India fastest growing major economy, Trump's perception of 'dead economy' misplaced: Analysts
ANI India fastest growing major economy With leading international agencies, including IMF, continuing to project India as the fastest-growing major economy in the world, analysts said that US President Donald Trump's description of India as a "dead economy" is "misplaced". India continues to be a hot-bed for foreign investment with several international giants looking at the country for setting up manufacturing base to Global Capability Centres (GCCs). Also, Indian talent is most sought after particularly in the tech sector and has been a major exporter of services to countries, including the US. A day after announcing 25 per cent tariffs on India, plus a 'penalty' for its trade with Russia, Trump in a social media post on Thursday said, "I don't care what India does with Russia. They can take their dead economies down together, for all I care." Consultancy firm EY India described Trump's comments against India as "quite misplaced" and said, in fact, the centre of gravity of the world economy is slowly shifting to the Global South for which India has placed itself in a leading role. "On the other hand, the erstwhile developed economies are ageing fast and it is largely the contribution that Indian diaspora makes in these economies that they continue to show some positive growth," EY India Chief Policy Advisor DK Srivastava told PTI. Incidentally, the Executive Board of the International Monetary Fund (IMF) in its assessment of the Indian economy in February 2025 had commended "the authorities' prudent macroeconomic policies and reforms, which have contributed to making India's economy resilient and once again the fastest growing major economy". IMF had also said India's strong economic performance provides an opportunity to advance critical and challenging structural reforms to realise its ambition of becoming an advanced economy by 2047. EY's Srivastava further said the Indian economy is the most lively and dynamic in the world with its population among the youngest. As per the UN Population Statistics (2024), the median age of India's population is 28.8 years whereas that of the US is 38.5 and that of Europe is 42.8 years. "It is these advanced economies that have become aged both in terms of median age and in terms of growth prospects. Furthermore, India is also blessed with abundant human resources that are technologically skilled and making significant contributions to the futuristic fields of space, AI, and Gen-AI," Srivastava said. According to the IMF's latest World Economic Outlook Update report, India is poised to grow at 6.4 per cent in 2025 as well as 2026. This is also an upward revision from IMF's April forecast of 6.2 and 6.3 per cent, respectively. Similar projections have been made by other international agencies like Washington-headquartered World Bank, the Asian Development Bank (ADB) and Paris-based Organisation for Economic Cooperation and Development (OECD). While the World Bank and OECD have projected India's GDP growth at 6.3 per cent for FY26, ADB estimates it at 6.5 per cent.
Washington Post
an hour ago
- Business
- Washington Post
Why America's new crypto regime makes other countries nervous
Kenneth Rogoff is a professor of economics at Harvard, a former chief economist at the International Monetary Fund, and the author of 'Our Dollar, Your Problem: An Insider's View of Seven Turbulent Decades of Global Finance and the Road Ahead.' Has the United States decided to be the Switzerland of crypto? The laudable aim of the Trump administration's landmark cryptocurrency legislation, eloquently exposited by Treasury Secretary Scott Bessent, is to bring some much-needed regulatory clarity to the wild west of digital finance. However, by proffering an official stamp of approval, the U.S. is potentially providing a powerful vehicle for facilitating tax evasion and all manner of illegal activity worldwide.
Arabian Post
3 hours ago
- Business
- Arabian Post
Zambia Seeks 12-Month Extension for IMF Loan Deal
Zambia's government is pushing for a 12-month extension to its current loan arrangement with the International Monetary Fund, according to an official cabinet statement released on Wednesday. The proposal, if approved, would see the existing agreement, set to expire at the end of October, continue until October 2024. This decision follows a series of critical economic challenges faced by the southern African nation, which is heavily reliant on copper exports and has struggled with high public debt. The government's request is indicative of Zambia's efforts to secure sustained financial support while navigating the complexities of its recovery from an economic downturn. Zambia entered into a $1.3 billion loan programme with the IMF in 2022, aimed at stabilising the nation's economy and restructuring its debt. The programme, supported by Zambia's commitment to fiscal reforms, has been a key part of the country's strategy to restore investor confidence and economic growth after years of rising debt levels and financial instability. ADVERTISEMENT The IMF's loan has allowed Zambia to access essential financial assistance, which is crucial for keeping the country's public sector functioning. However, with the expiry date fast approaching, the government has expressed concerns over its ability to maintain fiscal discipline without the extended backing of the IMF. In the statement, officials acknowledged the difficulties of meeting all of the programme's requirements, particularly in the wake of global economic uncertainties and domestic fiscal challenges. 'The extension would help us maintain macroeconomic stability and continue our debt restructuring efforts,' said a senior government official familiar with the matter. The IMF's financial support has been instrumental in stabilising Zambia's economy during a period of serious external shocks, including the COVID-19 pandemic, global supply chain disruptions, and fluctuating copper prices. Copper, a vital commodity for the country, accounts for a significant portion of its export revenue, and its price volatility has had a substantial impact on Zambia's economic performance. The request for an extension also comes amid concerns about Zambia's debt sustainability. The country's public debt, which has been a long-standing issue, reached unsustainable levels over the past decade, leading to Zambia becoming the first African nation to default on its debt in 2020. Since then, the government has been working to renegotiate its loans with international creditors, and an extension of the IMF programme would give Zambia more time to make progress in these talks. Zambia's appeal for more time is not only about meeting the IMF programme's fiscal targets but also about gaining room to implement deeper economic reforms. The government has set out plans to streamline public sector expenditures, curb inflation, and improve the management of foreign currency reserves. However, achieving these goals remains a complex challenge, given the constraints of its economic environment. ADVERTISEMENT The extension would also enable the IMF to continue offering its expertise and monitoring Zambia's financial situation, ensuring that the country adheres to the necessary reform measures. The IMF has praised Zambia's efforts to restore fiscal discipline but has emphasised that continued progress is required to ensure long-term sustainability. It remains to be seen whether the IMF will grant the extension, but Zambia's request reflects the deep-seated need for international assistance as the country works to recover from its financial crises. Economists have warned that without additional support, Zambia could face serious setbacks in its recovery efforts. The IMF is expected to make a decision on the extension in the coming weeks, following consultations with the Zambian government. If approved, the additional 12 months would provide Zambia with the breathing space it needs to solidify its fiscal foundations and continue with much-needed reforms. This loan extension request also has implications for the broader global financial landscape. Given Zambia's role as one of the largest copper producers in Africa, the country's economic stability is of significance not only to its own population but also to the global supply chains that depend on its copper exports. The outcome of the IMF's decision could have a ripple effect on other countries in sub-Saharan Africa that are facing similar debt challenges. As global inflationary pressures and rising interest rates continue to impact developing economies, Zambia's negotiations with the IMF could set a precedent for other nations grappling with fiscal instability.
&w=3840&q=100)
First Post
5 hours ago
- Business
- First Post
In 7 numbers: What Trump doesn't know about India's economy he calls 'dead'
Trump on Thursday attacked India's ties with Russia, calling both economies 'dead', a remark that starkly contrasts with India's booming, globally recognised economic rise. His claim reflects ignorance of facts, as India remains one of the fastest-growing major economies read more Prime Minister Narendra Modi during a meeting with US President Donald Trump at the White House, in Washington. PTI US President Donald Trump on Thursday launched a scathing attack on India's economic partnership with Russia, dismissing both countries as having 'dead' economies. In a post on Truth Social, Trump wrote, 'They can take their dead economies down together, for all I care,' while blaming India's high tariffs, 'among the highest in the world,' he claimed, for hampering trade ties with the United States. However, Trump's portrayal stands in stark contrast to India's actual economic trajectory, which is marked by robust growth, increasing global relevance, and strong performance across key sectors. Far from being 'dead,' India is steadily establishing itself as one of the world's most dynamic and resilient economies. STORY CONTINUES BELOW THIS AD A snapshot of India's economic momentum: 6–7% Economic Growth: India continues to rank among the fastest-growing major economies, with real GDP growth averaging 6–7 per cent in recent years. The IMF projects a 6.4 per cent growth rate for both 2025 and 2026. Despite global headwinds, India has managed to keep retail inflation at 4.6 per cent, its lowest since 2018–19—while many Western nations grapple with surging costs of living. World's 4th-Largest Economy: India is currently the fourth-largest economy by nominal GDP, projected to overtake Germany and reach third place by 2027. For FY25, India's nominal GDP is estimated at $3.8 trillion. Services Sector Engine: Contributing over 50 per cent of the Gross Value Added (GVA), India's services sector, driven by IT, telecom, banking, and real estate, remains a major economic engine. It also employs nearly 30 per cent of the country's workforce. Manufacturing on the Rise: Under flagship initiatives like Make in India and the Production Linked Incentive (PLI) schemes, India is fast becoming a global manufacturing hub. It recently overtook China as the top smartphone exporter to the US. The manufacturing sector currently contributes 17 per cent to GDP and employs over 27.3 million people, with the government targeting a 25 per cent share by 2025. Explosive Export Growth: India's total exports soared to a record $824.9 billion in FY 2024–25, a 76 per cent jump over the past decade, fueled by growth in engineering goods, electronics, and pharmaceuticals. Strong FDI Inflows: India remains a magnet for foreign direct investment, recording $81.04 billion in FDI inflows in FY25, up 14 per cent year-on-year. The services sector received the highest FDI equity share, followed by software & hardware, and trading. FDI in manufacturing alone grew by 18 per cent. The US continues to rank among India's top three sources of foreign investment. STORY CONTINUES BELOW THIS AD Digital Payments Leadership: India has revolutionized its payments ecosystem through the Unified Payments Interface (UPI), which processed a staggering 172 billion transactions in 2024. The country's digital infrastructure is now considered a global model. Trump's comments may serve short-term political rhetoric, but they misrepresent the facts on the ground. India's economic fundamentals are strong, its global influence is expanding, and its growth story continues to attract investors and partners worldwide. Far from being in decline, India is firmly on an upward trajectory—vibrant, ambitious, and increasingly central to the global economy. Dismissing that progress does little to change the reality of a rising India.
Indian Express
7 hours ago
- Business
- Indian Express
ExplainSpeaking: Key takeaways from IMF's latest World Economic Outlook on India, the US, and the world
Dear Readers, On Tuesday (July 29), the International Monetary Fund (IMF) released the latest update of its World Economic Outlook (WEO). The IMF has 191 member countries, and its overall goal is to strive for their 'sustainable growth and prosperity'. It does so by fostering international trade, economic growth, and policies that encourage countries to cooperate, especially when it comes to monetary policy (that is, how each country manages its currency and finances). The WEO is the IMF's benchmark publication as it provides a comprehensive picture of the global economy as well as details of individual countries. The IMF releases the WEO twice every year, in April and October, apart from updating it twice — in January and July. The document released on Tuesday is the July update to the WEO released in April. The broader message is captured by the title of the update — 'Global Economy: Tenuous Resilience amid Persistent Uncertainty'. There are two main takeaways for the state of the global economy. First, the global economy has proven to be resilient, albeit tenuous, and second, the outlook is plagued by persistent uncertainty. Since the start of 2020, there has been no dearth of reasons to expect a global recession and a prolonged and broad-based slowdown in economic growth. First came the Covid-19 pandemic that created a once-in-a-lifetime economic and health disruption for all economies. It led to a spike in inflation thanks to the destruction of supply chains that had allowed goods to be traded seamlessly across the world. It also resulted in governments wildly exceeding their budget deficits — the difference between their expenditures and revenues — because while income from taxation fell because of lower economic activity, expenditures spiked with governments providing subsidies of all kinds to allay the economic ill-effects of the pandemic. By the time the world started coming out of its impact, February 2022 saw Russia invade Ukraine. That conflict, which is still ongoing, created an even bigger spike in inflation because supplies of several essential commodities, from foodgrains to fertilisers to crude oil plummeted suddenly even as consumers were flush with subsidy money. The net result was an inflation rate — the rate at which prices rise year on year — reaching historic levels. This, in turn, forced central banks across the world to raise interest rates sharply in a bid to contain inflation. Between a spike in inflation and the sudden reversal of monetary policy, every economic entity — be it governments, individual companies or even reputed banks and pension funds — faced an existential threat. Then, in January this year, when the world economy was starting to stabilise yet again, came the tariff onslaught unleashed by the second Trump Administration. The hike in tariffs — and counter tariffs — effectively works like an oil price shock; raising costs without raising production or productivity. And yet, despite all these upheavals, the global economy has managed to continue growing. That is the meaning of resilience. According to the latest update by the IMF: 'Global growth is projected at 3.0 percent for 2025 and 3.1 percent in 2026. The forecast for 2025 is 0.2 percentage point higher than that in the reference forecast of the April 2025 World Economic Outlook (WEO) and 0.1 percentage point higher for 2026.' However, this resilience is 'tenuous' (that is, unstable or with weak foundations). That's because, while the tariff situation isn't as bad as it appeared in April when US President Donald Trump first announced them on Liberation Day, it is not as if there is enough clarity about the eventual tariff rates. 'The new equilibrium could be one with tariff rates similar to those today, or it could be one in which rates are much higher, negotiations break down, and an escalation of protectionist measures restarts. Resetting tariff rates to the levels of April 2 or higher (as mentioned in the US administration's letters to trade partners) on August 1 and implementing tariffs as high as 50 percent on copper as currently pronounced would dampen global growth,' states the IMF. To be sure, a possible rebound in effective tariff rates is just one source of continued uncertainty. Another big downside risk comes from the geopolitical tensions (such as the ones in the Middle East and Ukraine), which could 'disrupt global supply chains and push commodity prices up'. Yet another worry is the growing build-up of debt, as governments continue to borrow far in excess of prudential norms. Higher government debt, especially in the so-called Advanced Economies, is pushing up interest rates. That's because it is now riskier to lend to governments because they are borrowing so much more. But the higher costs of borrowings will not be limited to developed economies; the worst affected by this push in interest rate might be the developing economies which need to borrow money for a longer period and where projects (read a massive infrastructure project) are considered to be much more risky than lending to the government of a first world country. What about the individual countries? The broad growth data hides considerable variation in the economic prospects of different countries. Source: IMF The US, from where most of the policy uncertainty is emanating at present, is expected to lose growth momentum in 2025, as against the past two years. By the end of 2025, US GDP would be close to $31 trillion. While the forecast in July is a marginal improvement (by 0.1 percentage point) over the April forecast, it is undeniable that the so-called 'Trump data' is worse than 'Biden data'. In 2026, the US growth is expected to slow down even further to just 1.2%. In sharp contrast, China, which is the main economic threat to the US, is expected to slow down only marginally and still manage to grow at a respectable rate of 4.8% for an economy with an annual GDP of over $19 trillion. In fact, China's GDP forecast for 2025 received the biggest upgrade — almost a full percentage point — against the April WEO (which pegged China's GDP growth at 4%). The Euro area, with a combined GDP of over $16 trillion, is also expected to grow at a rate faster than in the past two years. However, the biggest economy here — Germany — continues to witness economic stagnation. Immediately outside the Euro area, the UK is set to improve over the past two years, although the growth rate is expected to remain fairly weak at 1.2%. Japan's economy will improve its growth rate over 2024, but barely so, while the Russian economy will finally start to show the ill-effects of prolonged military conflict. India continues to be a bright spot in the global economy. It is expected to grow 6.4% in 2025. While this rate is substantially slower than 2023, the fact is that by growing at over 6% in a world where competing economies are struggling to grow even at one-third that rate, India is fast bridging the gap and ensuring that it overtakes one developed economy after another, at least in terms of total GDP. Lastly, Pakistan is expected to build on turning around its economic growth momentum, even though its growth rate is anaemic for an economy as small with a GDP of just around $380 billion. What can India do to further boost its economic growth rate? Share your views and queries at Take care, Udit Udit Misra is Deputy Associate Editor. Follow him on Twitter @ieuditmisra ... Read More
