Expect government attack on Gita Gopinath: Chidambaram on IMF forecast for Indian economy

Chidambaram said on Tuesday (January 21) that IMF Chief Economist Gita Gopinath was one of the first to denounce demonetisation and we must prepare ourselves for an attack by government ministers on the IMF and Dr Gita Gopinath as the IMF has announced reduced growth forecasts for India.

Senior Congress leader P Chidambaram on Tuesday (January 21) said that the BJP leaders would now attack the International Monetary Fund (IMF) and its India-born chief economist, Gita Gopinath, after the IMF on Monday (January 20) announced reduced growth forecasts for India. "IMF Chief Economist Gita Gopinath was one of the first to denounce demonetisation. I suppose we must prepare ourselves for an attack by government ministers on the IMF and Dr Gita Gopinath," tweeted Chidambaram.

IMF Chief Economist Gita Gopinath was one of the first to denounce demonetisation.

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

— P. Chidambaram (@PChidambaram_IN) January 21, 2020

The IMF has predicted that Indian economy will register 4.8 per cent growth in 2019 and at 5.8 per cent in 2020. Chidambaram, who was the Union Finance Minister during UPA regime, said that it is possible that if India would register a growth of less than 4.8 per cent in 2019-20.

"IMF`s World Economic Outlook report estimates India`s growth at 4.8 per cent in 2019," said the global money lender in a statement. The IMF added that the slowdown in India's economy would be due to reduced demand in the domestic market and stress in the nonbank financial sector. "The growth markdown largely reflects a downward revision to India`s projection, where domestic demand has slowed more sharply than expected amid stress in the nonbank financial sector and a decline in credit growth," said the IMF.

Gopinath said at the World Economic Forum (WEF) in Davos that the growth in India slowed largely due to stress in the non-banking financial sector and weak rural income growth."The downward revision primarily reflects negative surprises to economic activity in a few emerging market economies, notably India, which led to a reassessment of growth prospects over the next two years. In a few cases, this reassessment also reflects the impact of increased social unrest," she said at a press conference.