Impact of India Demonetization Subsides
Impact of India Demonetization Subsides

Impact of India Demonetization Subsides

Impact of India Demonetization Subsides

The International Monetary Fund on Saturday said the impact of demonetization in India had subsided and that industrial production as well as the purchasing managers’ index had recovered.
“We are seeing signs that the impact of demonetization has abated. Some estimates point to about 75% of the cash being replaced,” IMF deputy director, Asia and Pacific Department, Kenneth Kang said, PTI reported.
However, Kang said it was important to quickly replace the defunct currency in order to restore transactions and support people’s capacity to spend.
Changyong Rhee, director, IMF Asia and Pacific Department, said demonetization certainly had some negative impact on growth, but in 2017, it is expected to gradually fade away. “Thus, our growth is projected to rebound to 7.2% in 2017, and 7.7% in 2018, in fiscal-year basis,” he said.
The International Monetary Fund had in January pegged India’s growth rate for 2016 at 6.6% because of the impact of demonetization. On April 19, IMF had said India will not lose the tag of being the fastest growing economy in the world to China anytime soon.
Rhee said Asia is poised to remain the global growth leader into the future. “But as in the past, securing this leading position will require continuing policy upgrades, vigilance against risks, and reforms to boost domestic demand and address growth bottlenecks,” he said.
Noting that appropriate demand support and structural reforms are needed to reinforce growth momentum where it is weak, Rhee said monetary policy should generally remain accommodative, given that inflation is below target and there is slack in most economies.
However, some central banks should stand ready to raise the policy rate and/or tighten macroprudential settings if inflationary pressures increase or credit growth remains too high.


Short URL : https://goo.gl/gTHmy2
  1. https://goo.gl/pJW4b3
  • https://goo.gl/DbEA8z
  • https://goo.gl/GDKsP7
  • https://goo.gl/sKreZI
  • https://goo.gl/v9oQJx

You can also read ...

If both sides continue with tit-for-tat tariffs, the inflation would lead to further increases in interest rates  and give rise to disturbances in the currency markets.
The trade war between the US and China risks substantially...
Hong Kong’s GDP fell to 3.5% in the second quarter.
The outlook for Hong Kong’s economy is darkening as rising...
Many emerging market economies are better prepared now because they have a good international reserve position and they allow their exchange rates  to float more freely.
Italian economist Claudio Borio is considered an authority in...
Crypto Market Struggles as Bitcoin Dips Below $6,000
Bitcoin touched below $6,000 and dozens of smaller digital...
Bankruptcy Soars Among Elderly in United States
A growing number of retirees in the US are filing for...
China Growth Momentum Slows
China’s economy hit a mid-year rough patch as efforts to curb...
Norway to Surpass Sweden
Sweden’s economic prospects have dimmed in recent months and...
Lebanon Economy Struggling
Lebanon’s economy has been in a precarious position in recent...

Add new comment

Read our comment policy before posting your viewpoints