IMF says India’s economic growth is ‘much weaker’ than expected.
International Monetary Fund (IMF) on September 12 said that India’s economic growth is “much weaker” than expected due to corporate and environmental regulatory uncertainty and “lingering weakness” in some non-bank financial companies.
“Again, we will have a fresh set of numbers coming up but the recent economic growth in India is much weaker than expected, mainly due to corporate and environmental regulatory uncertainty and lingering weakness in some non-Bank financial companies and risks to the outlook are tilted to the downside, as we like to say,” IMF spokesman Gerry Rice told reporters at a news conference.
The IMF has cut its projection for India’s economic growth by 0.3% points to 7% for the fiscal year 2019-20 owing to the “weaker-than-expected outlook” for the domestic demand.
The economic growth slowed to a 7 year low to 5% in April to June quarter from 8% a year ago, as per the government data.
The growth is expected to rise to 7.2% points in FY21, down by the projected growth rate of 7.5 in the earlier report.
International Monetary Fund or IMF on Thursday said that India's economic growth is "much weaker" than expected due to corporate and environmental regulatory uncertainty and "lingering weakness" in some non-bank financial companies. https://t.co/XrBUu3GuTJ— Shivam Vij (@DilliDurAst) September 13, 2019
The economic slowdown was largely due to a sharp dip in the manufacturing sector and agriculture output, said the Ministry of Statistics and Programme Implementation in a statement.
IMF also raises concern over India not following data norms
According to former acting chairman of the National Statistical Commission, P.C. Mohanan, India’s deviations are a result of inadequate care paid to data dissemination related issues
The IMF has raised concerns about delays in the release of economic and financial data by the Indian government.
As per the IMF’s “Annual Observance Report of the Special Data Dissemination Standard for 2018”, India failed to comply with prescribed Special Data Dissemination Standard (SDDS)
SDDS is a practice mandatory for all IMF members to guide them in providing their economic and financial data to the public.
India subscribed to the SDDS (Special Data Dissemination Standard) on December 27, 1996 and met all its requirements on December 14, 2001.
In the year 2018, India deviated from requirements prescribed in the SDDS in at least one instance in all the data categories.
India’s deviations from the SDDS is a concern as other BRICS nations such as Brazil, China, South Africa, and Russia have maintained a consistent record in the same period.
What is Special Data Dissemination Standard (SDDS)?
The SDDS is a global benchmark for disseminating macroeconomic statistics to the public.
Data dissemination standards enhance the availability of timely and comprehensive statistics, which contributes to sound macroeconomic policies and the efficient functioning of financial markets.
SDDS subscription indicates that a country meets the test of “good statistical citizenship”.
Countries that subscribe to the SDDS agree to follow good practices in four areas: the coverage, periodicity, and timeliness of data; public access to those data; data integrity; and data quality.
The IMF has taken steps to enhance member country transparency and openness, including setting voluntary standards for dissemination of economic and financial data.