Reserve Bank of India (RBI) Governor Shaktikanta Das on Friday said the International Monetary Fund's (IMF) projection of 1.9 per cent GDP growth for India is highest among G20 nations, while the country is expected to post a sharp turnaround in FY22.
Quoting IMF global growth projections, the RBI Governor said, "India is among the handful of countries that is projected to cling on tenuously to positive growth at 1.9 per cent. In fact, this is the highest growth rate among the G-20 economies."
For 2021, the IMF projected sizable V-shaped recoveries, close to 9 percentage points for global GDP. India is expected to post a sharp turnaround and resume its pre-COVID pre-slowdown trajectory by growing at 7.4 per cent in 2021-22, he said.
The RBI chief said on April 14, the IMF released its global growth projections for 2020, and expected the world economy to plunge into the worst recession since the Great Depression. The IMF named it the 'Great Lockdown', estimating the total loss to global GDP over 2020 and 2021 at $9 trillion.
The estimated cumulative loss to global GDP is expected to be greater than the economies of Japan and Germany combined, he said.
The World Trade Organisation (WTO) expects global merchandise trade contracting by as much as 13-32 per cent in 2020.
"Global financial markets remain volatile, and emerging market economies are grappling with capital outflows and volatile exchange rates. Crude oil prices remain in a state of flux, despite the agreement on production cuts by Organisation of the Petroleum Exporting Countries (OPEC) plus countries," Das said.
The RBI Governor said that the macroeconomic and financial landscape of India had deteriorated in last one month, precipitously in some areas; but light still shines through bravely in some others.
In a bid to relieve pressure on an economy ravaged by the coronavirus pandemic, the central bank has injected funds equalling 3.2 per cent of GDP into the economy since the February 2020 monetary policy meeting to tackle the liquidity situation, he said.
Besides, the RBI has taken some additional measures to ensure conducive financial conditions and normalcy in the functioning of financial markets. "The RBI propose to take further measures to maintain adequate liquidity in the system and its constituents in the face of COVID-19 related dislocations; facilitate and incentivise bank credit flows; ease financial stress; and enable the normal functioning of markets," Das said.
The RBI chief announced reducing reverse repo rate by 25 basis points and TLTRO of Rs 50,000 crore to ensure that small and mid-sized corporates, including non-banking financial companies (NBFCs) and micro finance institutions (MFIs) get enough liquidity. It has been decided to provide special refinance facilities for a total amount of Rs 50,000 crore to NABARD, SIDBI and NHB.
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