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World economy in slowdown, growth to be lowest in decade; to hit India harder: IMF chief

With global economic slowdown, growth in 2019-20 will fall to its lowest since the beginning of the decade, affecting emerging market economies such as India more.

Published

6 years ago

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international monetary fund

With economic slowdown affecting almost 90 per cent of the world, growth in 2019-20 will fall to its lowest rate since the beginning of the decade and this is having a “more pronounced” effect on emerging market economies such as India, said the new International Monetary Fund (IMF) Managing Director, Kristalina Georgieva, on Tuesday, Oct 8.

Georgieva took over leadership at the IMF from Christine Lagarde as MD on Oct 1. Georgieva made this assessment one week ahead of the joint Annual Meeting between the IMF and World Bank (WB) in which both institutions will present their economic projections in a gathering of top central bankers and economy ministers.

The fund is due to release details in its updated World Economic Outlook on October 15.

“Two years ago, the global economy was in a synchronized upswing. Measured by GDP, nearly 75 per cent of the world was accelerating. The global economy is now in a synchronized slowdown. In 2019, we expect slower growth in nearly 90 per cent of the world,” said Georgieva in her first speech as MD, IMF.

“In the United States and Germany, unemployment is at historic lows. Yet across advanced economies, including in the US, Japan, and especially the Euro area, there is a softening of economic activity,” she said.

“In some of the largest emerging market economies, such as India and Brazil, the slowdown is even more pronounced this year,” she added.

She said the IMF is cutting its forecasts for growth this year and next. Previously, the world economy had been projected to expand by 3.2 per cent in 2019 and 3.5 percent in 2020.

The IMF had cut its projection for India’s economic growth by 0.3 percentage points to 7 per cent for the fiscal year 2019-20 owing to the “weaker-than-expected outlook” for the domestic demand.

Georgieva attributed the slowdown to a range of uncertainties — she called them “fractures” — including trade tensions, Brexit and geopolitical tensions.

Georgieva said that currencies are once again in the spotlight and disputes now extend between multiple countries and into other critical issues.

“Even if growth picks-up in 2020, the current rifts could lead to changes that last a generation — broken supply chains, siloed trade sectors, a ‘digital Berlin Wall’ that forces countries to choose between technology systems,” she said.

The IMF Managing Director said that global trade growth has come to a “near standstill.”

Amid rising trade war between the countries which is generally fought through tariffs and counter-tariffs, the chief called for nations to work together.

While trade tensions had been talked about as a danger to the economy, “now, we see that they are actually taking a toll,” she said.

She said trade tensions could result in “substantial weakening” of manufacturing and investment activity, and could subsequently affect services and consumption.

“Everyone loses in a trade war. For the global economy, the cumulative effect of trade conflicts could mean a loss of around $700 billion by 2020, or about 0.8 per cent of GDP. As a reference, this is approximately the size of Switzerland’s entire economy,” she said.

Georgieva compared the present scenario to that of two years ago, before the US-China trade war, when countries representing nearly 75 per cent of the world’s output were seeing accelerating growth.

To protect against a sharp global slowdown, Georgieva called on countries with funds available to deploy their “fiscal firepower”. She called for a “coordinated” response to the slowdown. “The world economy is still growing, it is just growing too slowly. To reverse this trend, and meet the aspirations of people, we cannot afford to be complacent. We must act,” she said.

The IMF chief’s statement came even as the Reserve Bank of India (RBI) said that the Indian economy which has largely been subdued in the past few quarters and signs of a slowdown have cropped up, is likely to face several more risks in the near term.

The RBI in its Monetary Policy Report, October 2019, has also said that a combination of domestic and global headwinds has depressed economic activity in the country “especially in terms of aggregate demand”. The near-term outlook of the Indian economy is fraught with several risks, said the report.

It said that private consumption, which is the major support of economic activity, has started to slow down due to several reasons.

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India News

Modi says right time to invest in Indian shipping sector; meets global CEOs

Published

1 month ago

on

October 29, 2025

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Prime Minister Narendra Modi on Wednesday exhorted global investors to take bets on the Indian shipping sector, pointing out that this is the “right time” for such a move.

The Prime Minister also met a select chief executives of global majors, including DP World and APM, at a specially convened meeting on the sidelines of the India Maritime Week 2025 held here.

“For all of you hailing from different countries, this is the right time to work in the Indian shipping sector and also expand (your presence),” Modi said during a public address before the closed-door meeting with CEOs.

Modi listed several targets being chased by India in the maritime sector over the next few years, and underlined the importance of the global community in the same.

“You all are an important partner who will help us achieve all our aims. We welcome your ideas, innovations and investments,” Modi said.

He said that India allows 100 per cent foreign direct investment in the shipping and ports sector, and also provides incentives under the “Make In India, and Make For The World” vision.

Addressing an audience, including leaders of various companies, the Prime Minister affirmed India’s commitment to strengthening the supply chain resilience at a global level.

He also said that India is engaged in creating world-class mega ports, and cited the work undertaken on the Vadhavan Port to the north of the financial capital, which entered the top-10 firms in the world on the first day.

The government is also looking to grow the capacity at 12 major ports by four times and increase India’s share in containerised cargo at the global level.

Later, Modi held a meeting with top CEOs of shipping sector companies from across the world.

As per people in the know, he met AP Moller-Maersk Chairman Robert Maersk Uggla, DP World Group Chairman Sultan Ahmed bin Sulayem, Mediterranean Shipping Company Chief Executive Soren Toft, Adani Ports and SEZ Managing Director Karan Adani and French company CMA-CGM’s Senior Vice President Ludovic Renou.

The participation from over 85 countries in the IMW sends a strong message, Modi said, noting the presence of CEOs of major shipping giants, startups, policymakers, and innovators at the event.

The Prime Minister also thanked Port of Singapore (PSA) for the nearly Rs 8,000 crore investment in the Jawaharlal Nehru Port Authority’s fourth terminal, pointing out that this is also the largest FDI in the port sector in India.

Modi said more than 150 new initiatives have been launched under the ‘Maritime India Vision’, resulting in nearly doubling the capacity of major ports, a substantial reduction in turnaround time, and a new momentum in cruise tourism.

—PTI

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Economy news

ITR filing last date today: What taxpayers must know about penalties and delays

The deadline for ITR filing ends today, September 15. Missing it may lead to penalties, interest charges, refund delays, and loss of tax benefits.

Published

3 months ago

on

September 15, 2025

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Income Tax Return

The deadline to file Income Tax Returns (ITR) for most taxpayers, including salaried individuals, pensioners, and small businesses not requiring audit, ends today, September 15. Those who miss the due date face penalties, interest charges, and loss of certain tax benefits.

Penalties for late filing

If the return is not filed by the deadline, taxpayers can still file a belated return until December 31. However, under Section 234F of the Income Tax Act, late filing attracts penalties.

  • For income up to Rs5 lakh: penalty is capped at Rs1,000.
  • For income above Rs5 lakh: penalty increases to Rs5,000.

Additionally, if any tax remains unpaid, Section 234A imposes an interest of 1% per month (or part thereof) until the return is filed.

Consequences of missing deadline

  • Loss of certain tax benefits: Belated filers cannot carry forward specific losses such as business or capital losses.
  • Restrictions on tax regime change: Taxpayers lose the option to switch between old and new tax regimes after the deadline.
  • Refund delays: Those eligible for refunds will face delays compared to timely filers.

Steps to file before time runs out

  • Gather documents: Form 16, Form 26AS, Annual Information Statement (AIS), bank interest certificates, and proofs of investments or deductions.
  • Use the e-filing portal: File immediately to avoid last-minute portal congestion.
  • Verify your return: Ensure the ITR is verified electronically or physically for it to be considered valid.

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Economy news

India’s GDP surges 7.8% in Q1, outpaces estimates and China

India’s GDP surged 7.8% in Q1 2025-26, the highest in five quarters, driven by strong services and agriculture sector growth, according to NSO data.

Published

3 months ago

on

August 29, 2025

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GDP Growth

India’s economy recorded a sharp growth of 7.8% in the April-June quarter (Q1) of 2025-26, surpassing the earlier estimate of 6.5% and outpacing China’s 5.2% growth in the same period. The figure also marks a notable rise from the 6.5% growth in the corresponding quarter last year, making it the fastest expansion in the last five quarters.

Strong performance across key sectors

According to data released by the National Statistical Office (NSO), the surge was driven primarily by the services sector, which expanded 9.3% compared to 6.8% a year ago, and the agriculture sector, which rose 3.7% against 1.5% last year.

The construction sector, however, witnessed a slowdown, growing 7.6% compared to 10.1% in the same quarter of the previous fiscal.

RBI’s earlier forecast

Earlier this month, the Reserve Bank of India (RBI) had projected a more modest Q1 growth of 6.5%, with overall real GDP growth for 2025-26 expected at 6.5%. RBI Governor Sanjay Malhotra attributed the positive outlook to favorable conditions, including a good monsoon, lower inflation, and strong government capital expenditure.

He said, “The above normal southwest monsoon, lower inflation, rising capacity utilisation and congenial financial conditions continue to support domestic economic activity. The supportive monetary, regulatory and fiscal policies, including robust government capital expenditure, should also boost demand. The services sector is expected to remain buoyant, with sustained growth in construction and trade in the coming months.”

India remains fastest-growing major economy

With China reporting 5.2% growth in April-June, India has retained its position as the world’s fastest-growing major economy. The latest figures highlight resilience in the face of external pressures, including recent US tariffs on Indian imports.

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