The Hindu Editorial Vocabulary– Oct 13, 2022; Day 367

Winter is coming: On IMF’s warning

Amid India’s slowing growth impulses (impetus), the International Monetary Fund has warned ‘the worst is yet to come’

The International Monetary Fund (IMF), in its latest World Economic Outlook report, has retained global growth hopes for 2022 at 3.2%, and lowered next year’s projection to 2.7% from 2.9%. The year 2023 will feel like a recession for many people in the world, the Fund has cautioned, as ‘the worst is yet to come’ amid tighter monetary policies to curb (hold or keep within limits) stubbornly (Tenaciously unwilling or marked by tenacious unwillingness to yield) high inflation and a spiralling (to advance or increase steadily; rise) energy and food crisis. While it retained India’s 2023-24 growth estimate at 6.1%, the IMF slashed this year’s forecast to 6.8%, from 7.4% in July. This is the second significant estimate after the World Bank’s 6.5% assessment that pegs (fix (a rate) at a particular level) India’s GDP rise below 7%, which the Reserve Bank of India and North Block mandarins (a person who has a very important job in the government, and who is sometimes considered to be too powerful) are expecting this year. The downgrade is attributed to ‘weaker than expected outturn’ in the second quarter and subdued (Hold within limits and control) external demand. The slowing growth in tax collections, industrial output and exports, back this prognosis (A prediction about how something (as the weather) will develop). The road ahead — rendered tortuous by the lingering (To hang about in a place beyond the proper or usual time) Russia-Ukraine conflict, a slowdown in China and what the IMF has eloquently (In an articulate manner) termed a ‘cost of living crisis’ — is not much travelled on. The risk of monetary, fiscal or financial policy miscalibration (To calibrate poorly or wrongly) has risen sharply amid high uncertainty and growing fragilities, the Fund has emphasised.

After likely losing the tag to Saudi Arabia this year, the IMF expects India to become the fastest growing major economy in the world again next year. But private forecasters such as Nomura believe policy makers’ optimism about 2023-24 prospects may be misplaced as the global downturns’ ripple effects (The effect of an event setting off other events in an unexpected way, or in unexpected areas) may be underestimated, and growth could well slip to 5.2%. Either way, relative prosperity compared to the world alone will not suffice. India needs to not only grow significantly faster than its faltering (Unsteady in speech or action) pre-pandemic trajectory but also deliver better quality growth that is inclusive and meets the aspirations of millions of its youth who constitute its demographic dividend. The country has only a small window now to cash in on (Take advantage of or capitalize on) this sweet spot. Moreover, given India’s low per capita income, the sustained surge in prices has hit most households’ spending capacity, and could even cramp (Prevent the progress or free movement of) their ability to invest in the next generation’s education. Ministers’ assertions that India had managed to rein in (to limit or control) inflation and it is not a priority concern may have been premature as August and September witnessed a resurgence in price rise from July’s minor relief of 6.71% after staying above 7% in the first quarter. The Government has begun work on Budget 2023-24, but the second half of this year still needs to be navigated deftly (With dexterity; in a dexterous manner).

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