Global Economic Slowdown Effect ‘More Pronounced’ In India: IMF Chief

International Monetary Fund (IMF) chief, Kristalina Georgieva has said, the global economy is witnessing “synchronized slowdown” and its effect is “more pronounced” like India. Georgieva said slower growth is expected this year in nearly 90% of world economies. "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 managing director of the International Monetary Fund.

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

Kristalina Georgieva, the former World Bank CEO assumed the role of interim IMF President from February 1.

"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.

Recently, in an effort to aid the domestic sector fighting economic slowdown, the Narendra Modi government announced corporate tax rates to be slashed for domestic companies and for new domestic manufacturing companies. Announcing the key measure, Union Finance Minister Nirmala Sitharaman said that, ‘to boost Make in India, another insertion inserted to Income Tax Act with effect from 2019-20, which allows any new domestic company incorporated on or after 1st Oct 2019 making fresh investment in manufacturing an option to pay income tax at rate of 15%.’

Last month, the Finance Minister had announced major steps to revive economic growth amid growing concern over economic slowdown. In a much-anticipated press conference, Nirmala Sitharaman announced several measures including a rollback of enhanced surcharge on foreign portfolio investors levied in the Budget. She also announced that Angel tax on start-ups has been lifted.