IMF projects global economy to shrink by 4.9% this year over Covid-19

The International Monetary Fund has sharply lowered its forecast for global growth this year because it envisions far more severe economic damage.

The International Monetary Fund has sharply lowered its forecast for global growth this year because it envisions far more severe economic damage from the coronavirus than it did just two months ago.

The IMF predicts that the global economy will shrink 4.9 per cent this year, significantly worse than the 3 per cent drop it had estimated in its previous report in April. It would be the worst annual contraction since immediately after World War II.

For the United States, the IMF predicts that the nation's gross domestic product the value of all goods and services produced in the United States will plummet 8 per cent this year, even more than its April estimate of a 5.9 per cent drop. This, too, would be the worst such annual decline since the US economy demobilized in the aftermath of World War II.

The IMF issued its bleaker forecasts Wednesday in an update to the World Economic Outlook it released in April.

The update is generally in line with other recent major forecasts. Earlier this month, for example, the World Bank projected that the global economy would shrink 5.2 per cent this year.

The IMF noted that the pandemic was disproportionately hurting low-income households, imperiling the significant progress made in reducing extreme poverty in the world since 1990.

Covid-19: Situation improves in New York, Europe; keep trade open, says IMF

Europe remains the most severely affected continent by the outbreak, with more than 1.1 million cases of the disease.

The World Health Organisation said on Sunday that a further 81,153 people have tested positive for the coronavirus disease over the preceding 24 hours, taking the overall number of cases confirmed since the start of the outbreak above 2.24 million.
In total, 6,463 people who have tested positive for Covid-19 have died over the preceding 24 hours, raising the total death toll to 152,551. The latest update indicates a decline in the daily increase of case numbers and deaths compared to data released by WHO on Saturday. Almost 4,000 fewer cases and 247 fewer deaths were reported worldwide on Sunday.

Europe remains the most severely affected continent by the outbreak, with more than 1.1 million cases of the disease. The Covid-19 death toll in Europe surpassed 100,000 on Sunday, according to WHO, after 3,737 more deaths were reported.

A further 37,589 cases and 2,516 deaths were reported in the Americas region, the bulk of which were in the United States.

Earlier in the day, WHO Director-General Tedros Adhanom Ghebreyesus addressed leading health officials during a video conference of G20 health ministers. The director-general called on the world's leading economies to offer urgent support to countries that are struggling to cope with the Covid-19 outbreak.

Ghebreyesus said that lifting lockdown restrictions for Covid-19 is not the end of the epidemic, it's just the beginning of the next phase. Speaking at the Group of 20 (G20) Health Ministers virtual meeting from Geneva, the WHO chief said it's vital in this next phase that countries educate, engage and empower their people to prevent and respond rapidly to any resurgence, Xinhua reported.

28,941 samples tested on April 15, says ICMR; WHO lauds health ministry

ICMR has also issued a list of 176 government laboratories and 78 private laboratories for the coronavirus testing.

Continuing its fight against coronavirus, the Indian Council of Medical Research (ICMR) said a total of 2,74,599 samples have been tested for Covid-19 detection so far, with 28,941 samples being tested on Wednesday.

The samples were taken from 2,58,730 individuals which is lower than the samples tested because many suspected patients were tested more than once, according to the statement released by ICMR.

On April 15, till 9 p.m., 28,941 samples have been reported, out of which 953 were found positive for Covid-19.

"At least 11,297 individuals have been confirmed positive among suspected cases and contacts of known positive cases in India," it said.

ICMR has also issued a list of 176 government laboratories and 78 private laboratories for the coronavirus testing.

ALSO READ: Coronavirus LIVE: India cases at 12380; IMF and WHO back India's efforts

Delhi has 8 government labs, including AIIMS, Lady Hardinge Medical College, National Centre for Disease Control, Ram Manohar Lohia Hospital, Institute of Liver & Biliary Sciences, Army Hospital Research & Referral, Maulana Azad Medical College, Vardhman Mahavir Medical College and Safdarjung Hospital.

Other than Delhi, there are 17 in Tamil Nadu and Maharashtra, 15 in Uttar Pradesh, 12 in Karnataka, 10 in Kerala, nine in Madhya Pradesh and Gujarat, eight in Rajasthan, seven in Andhra Pradesh, five in Assam and Bihar among others.

IMF asks Pakistan to reduce 'trade and commerce reliance' on China

The development comes as the mission has extended its stay in Pakistan for making more efforts to strike a consensus on the staff-level agreement.

The visiting IMF mission has asked Islamabad "to reduce its trade and commerce reliance on Beijing" and look for other international options by signing free trade agreements (FTA) with other countries too, a media report said on Friday.

The development comes as the mission has extended its stay in Pakistan for making more efforts to strike a consensus on the staff-level agreement as both sides so far persisted with their respective differences on "immediate measures" for reducing the revenue-expenditure gap and fixing cash bleeding energy sector, The News International said in the report.

Official sources confirmed to The News International on Thursday night that both sides were busy ironing out differences over revenue generation efforts as the Federal Board of Revenue (FBR) wants a further reduction in its revised target of 5,238 billion Pakistani rupees but the International Monetary Fund (IMF) desires to see the plan aimed at removing distortions and expanding narrowed tax base on a permanent basis.

According to senior Finance Ministry sources, the issue of discord between the IMF and financial authorities is the former's insistence to cut down heavily of Pakistan's reliance on trade and commerce ties with China and contract FTAs with other international partners.

This is a position Islamabad is not prepared to even consider.

Although, the Ministry of Finance and other officials claimed in their background discussions that there was no "deadlock" and the staff-level agreement would be finalized anytime soon.

But when they were asked to share details, they were non-committal saying that the talks were underway, so nothing could be stated with credence.

The mission arrived in Islamabad on February 2 for an 11-day second review of Pakis­tan's performance under the $6 billion bailout package signed in July 2019 amid a massive revenue shortfall in the first seven months of the current fiscal year, Dawn news said in a report last week.

IMF, Gopinath will draw govt's ire, warns Chidambaram after growth forecast

"I suppose we must prepare ourselves for an attack by government ministers on the IMF and Dr Gita Gopinath," Chidambaram said.

BS : With the IMF lowering India's economic growth estimate for the current fiscal to 4.8 per cent, senior Congress leader P Chidambaram on Tuesday claimed an attack on the world body and its chief economist Gita Gopinath by government ministers was imminent.

He also alleged that the growth figure of 4.8 per cent given by the International Monetary Fund (IMF) is after some "window dressing" and he won't be surprised if it goes even lower.

"Reality check from IMF. Growth in 2019-20 will be BELOW 5 per cent at 4.8 per cent," Chidambaram said in a series of tweets.

"Even the 4.8 per cent is after some window dressing. I will not be surprised if it goes even lower," the former finance minister said.

IMF Chief Economist Gopinath was one of the first to denounce demonetisation, he noted.

"I suppose we must prepare ourselves for an attack by government ministers on the IMF and Dr Gita Gopinath," Chidambaram said.

The IMF lowered India's economic growth estimate for the current fiscal to 4.8 per cent and listed the country's much lower-than-expected GDP numbers as the single biggest drag on its global growth forecast for two years.

In October, the IMF had pegged India economic growth at 6.1 per cent for 2019.

Listing decline in rural demand growth and an overall credit sluggishness for lowering of India forecasts, Gopinath, however, had said the growth momentum should improve next year due to factors like positive impact of corporate tax rate reduction.

IMF says India's growth 'much weaker' than expected; cuts FY20 projection

The economic growth slowed to a seven-year low to 5 per cent in April to June quarter from 8 per cent a year ago, as per the government data.

International Monetary Fund (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.

"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 economic growth slowed to a seven-year low to 5 per cent in April to June quarter from 8 per cent a year ago, as per the government data.

The International Monetary Fund (IMF) has 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.

The growth is expected to rise to 7.2 per cent points in FY21, down by the projected growth rate of 7.5 in the earlier report.

The 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.

The previous low was recorded at 4.9 per cent in April to June 2012-13. Consumer demand and private investment have weakened amid global trade frictions and dampening business sentiment.

Business Standard

Why finding an ATM in India is getting tougher even as people use them more

India already has the fewest ATMs per 100,000 people among BRICS nations, according to the International Monetary Fund.

Business Standard : Finding an ATM in India is getting tougher even as dependence on cash persists, thanks to tighter regulations that make it more costly to run the machines.

The number of automated teller machines in the country shrank in the past two years despite an increase in transactions, Reserve Bank of India figures showed Saturday. India already has the fewest ATMs per 100,000 people among BRICS nations, according to the International Monetary Fund.

The drop may continue as banks and ATM operators struggle to absorb the cost of software and equipment upgrades mandated by the central bank last year to bolster security. That risks undermining Prime Minister Narendra Modi’s campaign of increasing financial inclusion in a nation where cash remains king less than three years after he pulled most banknotes from circulation.

“Declining numbers of ATMs will impact a large segment of the population, especially those who are socio-economically at the bottom of the pyramid,’’ said Rustom Irani, managing director at Hitachi Payment Services Pvt. Ltd., a provider of the machines. “Penetration in the country is already very low.”

As security costs swell, ATM operators are being squeezed because the fees they rely on for revenue remain low and can’t rise without the approval of an industry committee. ATM operators – which include banks as well as third parties – charge a so-called interchange fee of 15 rupees to the lender whose debit or credit card is used for cash withdrawals.

“Interchange fees are the biggest factor behind muted growth of ATMs. They have to reflect ground reality,” said R. Gandhi, a former RBI deputy governor. “Banks are finding it cheaper to pay interchange fees to other banks rather than operating their own ATMs.”

Yet not everyone agrees that increasing fees is the solution. If they are raised, banks might pass the higher charges on to customers, according to R. Subramaniakumar, chief executive officer at Indian Overseas Bank.

Access to basic financial services including ATMs has become more crucial after Modi added 355 million people to the banking system since taking office in 2014. Many Indians opened accounts when the prime minister made 86% of banknotes illegal in November 2016. That boosted direct transfers of welfare benefits to people’s accounts, increasing reliance on ATMs.

Branch rationalization by some public-sector lenders is another factor behind the drop in ATMs.