In an in depth presentation on the world economic system on the ongoing G20 Sherpa assembly in Udaipur, seen by ET, the IMF cautioned that high-frequency indicators level to a weakening world development momentum within the fourth quarter and sought measures to assist development.
The multilateral lender known as for tightening the fiscal coverage to deal with elevated debt ranges and surging inflation.
It harassed on the necessity for orderly deleveraging and sound debt restructuring frameworks to mitigate dangers, whereas flagging the elevated danger of excessive sovereign debt.
“Private and non-private debt overhang would require deleveraging,” it stated.
“Tighten fiscal coverage to deal with elevated debt and, the place inflation is elevated, to keep away from working towards financial coverage,” the presentation highlighted, including that the combat towards inflation must proceed and the place wanted international locations ought to use macroprudential coverage to keep away from danger from materializing.
The IMF has projected the Indian economic system to develop by 6.8% within the present fiscal 12 months (FY23) and 6.1% within the subsequent fiscal 12 months.
The world financial development is anticipated to sluggish to three.2% in 2022 and a pair of.7% in 2023.
Forecasts indicate vital medium-term output losses for all world areas, notably amongst rising market and growing economies, it stated, whereas mentioning that the draw back dangers to the outlook have been prevalent.
“Whereas transport prices are easing, indicators of latest export orders level to weak point,” it stated, whereas observing that the trade-related uncertainty was spiking and calling for supporting development in diversified world commerce. “The variety of commerce restrictions have been on the rise, particularly in high-tech and vitality sectors,” the presentation identified.
The IMF advised focused short-term measures to assist essentially the most susceptible in view of the slowing world economic system and excessive inflation.
It harassed on urgently implementing and broadening the G20 Widespread Framework and supporting development in diversified world commerce.
The multilateral physique additionally emphasised on the necessity to strengthen world cooperation to mitigate fragmentation dangers.