Global Economic Outlook A Cause For Concern, Says Nirmala Sitharaman At World Bank-IMF Spring Meeting

In its latest World Economic Outlook, the International Monetary Fund (IMF) estimated that global growth will bottom out at 2.8 per cent in 2023, lower than the earlier estimates

Finance Minister Nirmala Sitharaman also said the current headwinds and strained global supply chains have put tremendous pressure on the global economy.

Union Finance Minister Nirmala Sitharaman on Thursday said India remained concerned about the global economic outlook despite this year’s projected growth rate of over 6 per cent for the Indian economy. Sitharaman expressed her concerns during the Development Committee Meeting at the World Bank-IMF spring meeting 2023 in Washington DC. 

In its latest World Economic Outlook, the International Monetary Fund (IMF) estimated that global growth will bottom out at 2.8 per cent in 2023, lower than the earlier estimates. It said that a sharp tightening of global financial conditions could have a dramatic impact on credit conditions and public finances, especially in emerging markets and developing economies.

"Finance Minister Nirmala Sitharaman stated that despite this year’s projected growth rate of over 6 percent for the Indian economy, we remain concerned about the global economic outlook and geopolitical environment," according to a tweet by the ministry. 

Union Finance Minister Smt. @nsitharaman attends the Development Committee Meeting of the World Bank-IMF #SpringMeeting2023 , in Washington DC, today. (1/5) pic.twitter.com/J6bksxpad8

— Ministry of Finance (@FinMinIndia) April 12, 2023

"FM Smt. @nsitharaman posited that  @WorldBank should continue to work for its vision of ‘A World Free of Poverty’ and seeks to achieve its mission of ‘ending extreme poverty’ and ‘promoting shared prosperity’ in a manner that is #inclusive, #resilient and #sustainable," Finance Ministry said. 

"During her intervention, Finance Minister Smt. @nsitharaman suggested that the global public goods #GPG should also be brought into the focus as the third goal," the tweet added.

The Reserve Bank of India anticipates economic growth of 6.5 per cent for the fiscal year 2023-24, compared to the IMF's forecast of 5.9 per cent. The IMF predicted that India's growth momentum will decline as softening domestic demand offsets strong external services demand in its Regional Economic Outlook for the Asia Pacific region on Thursday.

According to PTI, Finance Minister also said the current headwinds and strained global supply chains have put tremendous pressure on the global economy, marked by persistently high-interest rates, northbound inflationary pressures, and currency depreciation.

The recent turbulence in the banking sector in some advanced economies has further increased the challenges to global economic recovery and increased fiscal pressures, especially on EMDEs and LDCs, she said at the 107th meeting of the Development Committee. 

“The need of the hour is a people centric, equity driven, consensus-based, and collective approach to face global developmental challenges. We encourage the World Bank Group (WBG) to evolve into a bigger and better bank, which is ‘fit for purpose’ to address the new world challenges," Sitharaman said. 

“We look forward to a WBG that deploys innovative ways to mobilises resources, unleashes its full potential as a solutions and knowledge bank, and fully leverages its comparative advantage to build a better world," she added.