IMF lowers India's growth forecast over demonetisation, GST

Agencies
October 10, 2017

Washington, Oct 10: The IMF today lowered India's growth projection to 6.7 per cent in 2017, 0.5 percentage points less than its previous two forecasts and slower than China's 6.8 per cent, attributing it to demonetisation and introduction of the GST.

The International Monetary Fund (IMF) raised its current year growth forecast for China to 6.8 per cent, 0.1 percentage more than its two previous projections in April and July -- pushing the Communist giant above India at the top of the global growth tally.

It also lowered India's growth for 2018 to 7.4 per cent, 0.3 percentage points less than its previous two projections in July and April. India's growth rate in 2016 was 7.1 per cent, which saw an upward revision of 0.3 percentage points from its April report.

"In India, growth momentum slowed, reflecting the lingering impact of the authorities' currency exchange initiative as well as uncertainty related to the midyear introduction of the country-wide Goods and Services Tax," the IMF said in its latest World Economic Outlook report.

"Strong government spending and data revisions in India led to an upward revision of 2016 growth to 7.1 per cent (6.8 per cent in April), with upward revisions of about 0.2 percentage point, on average, for 2014 and 2015," it said.

The latest report, released ahead of the annual meetings of the IMF and the World Bank here this week, puts China slightly ahead of India in terms of growth rate for the year 2017.

However, India is likely to regain the tag of the fastest growth emerging economies of the world in 2018, with China projected to grow at 6.5 per cent in 2018, it said.

The GST, which promises the unification of India's vast domestic market, is among several key structural reforms under implementation that are expected to help push growth above eight per cent in the medium term, the report said.

"In India, simplifying and easing labour market regulations and land acquisition procedures are long-standing requirements for improving the business climate," the report said.

Between 1999 and 2008, India on an average grew at a rate of 6.9 per cent, the IMF said, adding that for the next three years its growth rates were 8.5 per cent in 2009, 10.3 in 2010 and 6.6 in 2011.

In the years 2012, 2013 and 2014 it grew at a rate of 5.5 percentage, 6.4 and 7.5 respectively. In 2015, India clocked a growth rate of 8 percentage points.

For the year 2022, the IMF has projected a growth rate of 8.2 per cent, as against its growth projection of 6.7 in 2017 and 7.4 in 2018.

The Goods and Services Tax (GST) was implemented in India from July 1 this year. It brings the economy under a uniform tax regime.

The Indian government scrapped Rs 500 and Rs 1,000 currency notes on November 8 last year, claiming that the move would eradicate black money, fake currency and corruption.

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News Network
May 28,2020

Geneva, May 28: The global death toll from the novel coronavirus has risen over the past 24 hours by 5,581 to 349,095, the World Health Organization (WHO) said in its daily situation report.

The number of confirmed cases has increased by 84,314 to 5,488,825, the WHO said.

Most cases of infection are recorded in the Americas (North and South America) - 2,495,924, with 145,810 deaths. While Europe has reported 2,061,828 cases and 1,76,226 deaths so far.

As per WHO tally, the US has the highest number of cases in the world with 1,63,4010 infections.

The global health body declared the outbreak of the new coronavirus a pandemic on March 11.

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News Network
January 28,2020

Jan 28: China said on Tuesday that 106 people had died from a new coronavirus that is spreading across the country, up from the previous toll of 81.

The number of total confirmed cases in China rose to 4,515 as of Jan. 27, the National Health Commission said in a statement, up from 2,835 reported a day earlier.

The United States warned against travel to China on Monday and Canada issued a more narrow travel warning as the death toll from the spreading coronavirus passed 100, with tens of millions stranded during the biggest holiday of the year and global markets rattled.

Global stocks fell, oil prices hit three-month lows, and China's yuan dipped to its weakest level in 2020 as investors fretted about damage to the world's second-biggest economy from travel bans and the Lunar New Year holiday, which China extended in a bid to keep people at home.

The health commission of China's Hubei province said on Tuesday that 100 people had died from the virus as of Jan. 27, according to an online statement, up from the previous toll of 76, with the number of confirmed cases in the province rose to 2,714.

Other fatalities have been reported elsewhere in China, including the first in Beijing, bringing the deal toll to 106 so far, according to the People's Daily. The state newspaper put the total number of confirmed cases in China at 4,193, though some experts suspect a much higher number.

On Monday, US President Donald Trump offered China whatever help it needed, while the State Department said Americans should "reconsider" visiting all of China due to the virus.

Canada, which has two confirmed cases of the virus and is investigating 19 more potential cases, warned its citizens to avoid travel to China's Hubei province, at the heart of the outbreak.

Authorities in Hubei province are taking increasing flak from the public over their initial response to the virus. Chinese Premier Li Keqiang visited the city of Wuhan, epicentre of the outbreak, to encourage medical workers and promise reinforcements.

Visiting Wuhan in blue protective suit and mask, Li praised medics, said 2,500 more workers would join them in the next two days, and visited the site of a new hospital to be built in days.

The most senior leader to visit Wuhan since the outbreak, Li was shown on state TV leading medical workers in chants of "Wuhan jiayou!" - an exhortation to keep their strength up.

China's ambassador to the United Nations, following a meeting with UN Secretary-General António Guterres on Monday, said "the Chinese government attaches paramount importance to prevention and control of the epidemic, and President Xi Jinping has given important instructions. ...

"China has been working with the international community in the spirit of openness, transparency and scientific coordination," he said.

Guterres said in a statement, "The UN appreciates China's effort, has full confidence in China's ability of controlling the outbreak, and stands ready to provide any support and assistance."

MOUNTING ANGER

On China's heavily censored social media, officials have faced mounting anger over the virus, which is thought to have originated from a market where wildlife was sold illegally.

Some criticised the governor of Hubei province, of which Wuhan is the capital, after he corrected himself twice during a news conference over the number of face masks being produced.

"If he can mess up the data multiple times, no wonder the disease has spread so severely," said one user of the Weibo social media platform.

In rare public self-criticism, Wuhan Mayor Zhou Xianwang said the city's management of the crisis was "not good enough" and indicated he was willing to resign.

The central Chinese city of 11 million people is in virtual lockdown and much of Hubei, home to nearly 60 million people, is under travel curbs.

Elsewhere in China, people from the region faced questioning about their movements. "Hubei people are getting discriminated against," a Wuhan resident complained on Weibo.

Cases linked to people who travelled from Wuhan have been confirmed in a dozen countries, from Japan to the United States, where authorities said they had 110 people under investigation in 26 states. Sri Lanka was the latest to confirm a case.

INVESTORS WORRIED

Investors are worried about the impact. The consensus is that in the short term, economic output will be hit as authorities limit travel and extend the week-long New Year holiday — when millions traditionally travel by rail, road and plane - by three days to limit spread of the virus.

Asian and European shares tumbled, with Japan's Nikkei average sliding 2%, its biggest one-day fall in five months. Demand spiked for safe-haven assets such as the Japanese yen and Treasury notes. European stocks fell more than 2%.

The US S&P 500 closed down nearly 1.6%.

"China is the biggest driver of global growth so this couldn't have started in a worse place," said Alec Young, FTSE Russell's managing director of global markets research.

During the 2002-2003 outbreak of Severe Acute Respiratory Syndrome (SARS), which originated in China and killed nearly 800 people globally, air passenger demand in Asia plunged 45%. The travel industry is more reliant on Chinese travellers now.

Chinese-ruled Hong Kong, which has had eight cases, banned entry to people who had visited Hubei recently.

Some European tour operators cancelled trips to China, while governments around the world worked on repatriating nationals.

Officially known as 2019-nCoV, the newly identified coronavirus can cause pneumonia, but it is still too early to know just how dangerous it is and how easily it spreads.

"What we know about this virus it that transmission occurs through human contact but we are speaking of close contact, i.e. less than a meter," said Jerome Salomon, a senior official with France's health ministry.

"Crossing someone (infected) in the street poses no threat," he said. "The risk is low when you spend a little time near that person and becomes higher when you spend a lot of time near that person."

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News Network
February 24,2020

Kuala Lumpur, Feb 24: Malaysian Prime Minister Mahathir Mohamad has submitted his resignation to the king, two sources with direct knowledge of the matter told Reuters on Monday, amid talks of forming a new coalition to govern the country.

Mahathir, 94, assumed office in May 2018 for his second stint as prime minister.

A spokesman from the prime minister's office declined to comment, saying only that a statement will be issued soon.

The sources declined to be named as they were not authorised to talk to the media.

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