IMF wants govt to be more credible, transparent on fiscal numbers

The comments come amid allegations of the budget math not adding up with some pointing to a Rs 1.7 trillion hole in the estimates

New Delhi needs to become more “transparent” on the fiscal numbers as it is a “laggard” among the G20 peers on this front, a senior official from the International Monetary Fund said here on Wednesday.

The government has been missing its budgeted fiscal targets for the past few years and there is a need for a “credible fiscal consolidation” which is more ambitious as well, the official said, adding this is more so as government has not addressed how it will make up for the massive Rs 1.45 trillion tax giveaways in the form of corporate tax cuts.

The comments come amid allegations of the budget math not adding up with some pointing to a Rs 1.7 trillion hole in the estimates, and also over 100 economists questioning the official data computation.

“Fiscal transparency should be increased. It is fairly difficult for the private sector to get the full picture on fiscal standing,” the fund’s deputy director Anne-Mary Gulde said speaking at an NSE event here. “India is somewhat lacking in a programme on G20 data initiative on fiscal transparency where comparative countries have all made greater progress,” she added.

She said there is also a need for more credible fiscal consolidation as such a move will help reduce the relatively high level of debt and free up financial resources for the private sector…

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Pakistan needs to repay China more than double amount it owes IMF

The South Asian nation owes $6.7 billion in commercial loans to China over the three years through June 2022, according to the IMF

Pakistan needs to repay China more than double the amount it owes the International Monetary Fund in the next three years, as loans racked-up to boost foreign exchange reserves and bridge a financing gap become due.

The South Asian nation owes $6.7 billion in commercial loans to China over the three years through June 2022, according to the IMF, which this year approved a new program to bail out Pakistan from a crisis. Islamabad needs to pay the multilateral lender $2.8 billion in the same period.

Pakistan, one of the biggest beneficiaries of China’s Belt and Road Initiative, has been borrowing from Beijing to tide over a Pakistan financial crisis. Still, the money was enough to only partly bridge a financing gap, pushing the South Asian nation to knock at the IMF’s doors.

“The borrowing picked up after the Belt and Road started,” said Hafiz Faizan Ahmed, head of research at Karachi-based Optimus Capital Management Pvt. “A bulk of the Chinese lending happened about two years ago when dollar reserves were dwindling, so the government kept borrowing and borrowing.” A report last year by the Center for Global Development listed Pakistan among eight nations that face potential debt-sustainability problems because of the belt-road plan…

World Bank retains projections for India’s economic growth at 7.5%

For the current fiscal year, the growth is quite high, given the fact that India’s economy grew just 6.8 per cent in 2018-19, a five-year low

After the feeble total national output (GDP) information, India has something to cheer about. The World Bank has held projections for India’s monetary development at 7.5 percent for the current financial year even as it cut worldwide monetary extension by 0.3 rate focuses. In its Global Economic Prospects report, the World Bank, be that as it may, pegged the development at a similar pace of 7.5 percent for the following two financial years.

For the current monetary year, the development is very high, given the way that India’s economy became simply 6.8 percent in 2018-19, a five-year low. Likewise, the development dove to 5.8 percent in the final quarter of the financial year, additionally a five-year base. Additionally, the International Monetary Fund (IMF) had prior sliced financial development of India to 7.3 percent from prior projection of 7.5 percent. The Asian Development Bank (ADB) pegged the development at 7.2 percent.

World Bank holds projections for India’s financial development at 7.5%

Without naming Pulwama fear assault and Balakot strike, the Bank made a reference to these episodes among India and Pakistan. “Engagements among India and Pakistan in February are an update that dormant geopolitical pressures can erupt whenever,” the Bank said. The Bank said venture rate in India was relied upon to develop at a slower pace in 2019 than in 2018. It, in any case, said speculation development was relied upon to stay strong as advantages of ongoing strategy changes additionally appeared.

“Private utilization and speculation will profit by fortifying credit development in the midst of progressively accommodative money related approach, with expansion having fallen underneath the Reserve Bank of India’s objective,” it said.

New NITI Vice-Chairman Rajiv Kumar hints at more exits after Panagariya

According to a column by Kumar, foreign influence on Indian policy making is fading under Modi

Under Narendra Modi, foreign influence on Indian policy making is fading away, writes Rajiv Kumar, who has been selected to replace Arvind Panagariya as the new vice-chairman of the NITI Aayog. In a column published by Hindi daily Dainik Jagran, while referring to Panagariya's exit earlier this month and Raghuram Rajan's decision last year to return to academia after completing his three-year stint as the RBI governor, Kumar writes that if "rumours in Lutyens’ Delhi" are to be believed, more such resignations may occur.

According to Kumar's column, as the "Anglo-American" influence fades, India may see the appointment of homegrown experts who understand its ground realities better than their foreign counterparts and who will be willing to stay and work until the end of their terms.

(economy policy)

Kumar, who holds a DPhil in Economics from the Oxford University and a Ph.D. from the Lucknow University, also argues in his column that it has taken a long time for the Indian policy establishment to shed what he describes as its "Macaulayist mentality".

Kumar writes that in the past, experts emerging from domestic academic institutions have been turned down for high-ranking government positions in favour of their foreign counterparts. As a result, Kumar argues, Indian policies have been influenced by organisations like the IMF, the World Bank, and the foreign universities that these imported experts revere.

As reported earlier, Kumar, a homegrown economist who likes to keep a low profile, is currently a senior fellow at the Centre for Policy Research (CPR) and has also served as the director of the Indian Council for Research on International Economic Relations (ICRIER). CPR and ICRIER are two of the biggest think-tanks in the country....

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Rupee set to shed gains, weaken to 65 if dollar revives: Reuters poll

Chinese yuan is forecast to weaken to 6.90 per dollar a year

In 12 month's time the Chinese yuan will have erased most of its gains made this year, provided the US Federal Reserve sticks to its tightening path, boosting the greenback, a Reuters poll showed.

Having strengthened more than 3 per cent since the start of 2017, the yuan is forecast to weaken to 6.90 per US dollar in a year, according to the poll of over 60 foreign exchange analysts taken July 27-Aug 2.

It was trading around 6.72 on Wednesday.

While the US dollar should benefit when the Fed starts shrinking its balance sheet, which it has said it expected to do "relatively soon", it could falter again if the central bank fails to follow through with a rate hike later this year. 

At the start of the year, traders had expected faster rate hikes from the Fed and some form of stimulus from the new Trump administration would drive the dollar up strongly against emerging currencies.(economy policy)

But, the greenback has instead taken a beating on fading hopes that President Trump will be able to push through deep tax cuts and massive infrastructure spending.

That has brightened the outlook for Asian currencies.

Strong Chinese economic data over recent months has cooled worries over the yuan's weakening, leaving further scope for the People's Bank of China (PBOC) to tighten the country's domestic liquidity conditions.

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