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Slowdown in global growth, trade to hit emerging market economies: RBI Governor Das


The biggest risk facing economies is growing evidence that global growth and trade is weakening, (RBI) has said.

At the same time, emerging markets face a wave of global spillover risks leading to capital outflows, currency and asset price volatility besides tightened financial conditions, posing risks to growth and inflation.

Unsettled trade tensions and developments around Brexit are imparting further downside risks to the outlook, said Das.

"There is considerable uncertainty as to whether this weakness is temporary or the beginning of a recession in advanced economies," he said while addressing the event 'Talks' on the sidelines of International Monetary Fund-Spring Meetings.

The risk of sudden stops and reversals of capital flows can aggravate existing stress in the balance sheets of lending institutions in some emerging markets and stretch their capital requirements, said Das on Friday.

"For like India, the recent firming up of on production cuts by major suppliers presents risks to current account deficit and inflation. Emerging economies also need to explore alternatives to reduce dependence on conventional energy sources, and give greater focus on renewables and "

is expected to clock a real GDP growth of 7.2 per cent during 2019-20 and continue to rank as the fastest among large economies of the world.

Inflation has been averaging 3.6 per cent and current account deficit is expected to be about 2.5 per cent of GDP.

Looking ahead, said Das, the priority should be to remain watchful and take coordinated action to revive growth and maintain macroeconomic, financial and price stability.

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Sat, April 13 2019. 16:17 IST