RBI Governor Says Global Growth And Trade Weakening, Highlights That India Is Fastest Growing Large Economy

India's real GDP growth is expected to clock 7.2% during 2019-20, the fastest among large economies of the world, growing by an average rate of around 7.5% in recent years, noted Shaktikanta Das, Governor, Reserve Bank of India in a speech titled Global Risks and Policy Challenges facing Emerging Market Economies- delivered at the event "Governor Talks" on the sidelines of the Fund-Bank Spring Meetings, 2019, Washington DC.

Talking about India, he stated further that inflation has remained below target, averaging 3.6 per cent for the period under the inflation targeting framework so far (since October 2016 up to February 2019); the current account deficit is expected to be around 2.5% of GDP in 2018-19; and the gross fiscal deficit has adhered to budgetary targets. Looking ahead, our priority is to remain watchful and take coordinated action to revive growth and maintain macroeconomic, financial and price stability, he concluded.

The RBI chief noted that the biggest risk facing Emerging Market Economies (EME) is the growing evidence that global growth and trade is weakening. The second risk is that EMEs remain vulnerable to financial market volatility as the experience of 2018 has shown. The risk of sudden stops and reversals of capital flows has increased. He also stated that third risk to EMEs is the high volatility in international oil prices. For net energy importers like India, the recent firming up of oil prices on production cuts by major suppliers presents risks to current account deficit and inflation.

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