Soft landing of global economy is increasingly a possibility: Sitharaman

A softlanding of the global economy which has experienced tremendous stress over the past several years is increasingly a possibility Union Finance Minister Nirmala Sitharaman said Friday Observing that better days are ahead primarily because of the coordinated action between countries and multilateral financial institutions the finance minister at the same time sounded a note of caution that economies are not really picking up that much yetThe largest sense which prevailed in the twoday discussions both of the International Monetary Fund and also of the World Bank is that there will be a soft landing The efforts by the Fund the central banks and all institutions governments have kept the inflation down for some meaningful period Therefore soft landing is increasingly a possibility Sitharaman told a Washington DCbased global thinktankThen that reasonable growth numbers will come from even the advanced economies certainly not in the negative area And then the coordinated action between countries to manage any supply chain shocks that have been the character of the global economy in the last let us say at least two years are being faced by countries with a lot more preparedness and therefore the sense is we can only have better days than what we have seen in the last few years Sitharaman said during her appearance at the Centre for Strategic and International Studies CSIS thinktankBut with that said all of us had to sound a note of caution because economies are not really picking up that much yet They are all right you see them not going down further but there is still a moderated world trade picture Demand in the advanced economies are not really all that attractive So global trade doesnt see possibilities of great recovery sooner she saidAs a result countries which are very dependent on commodity exports or being a part of the global value chain are not seeing great demand pick up So the picture that is emerging is positive but its not going to rapidly change the situation Every country has borrowed much more than they ideally would do for the sake of recovery from COVID whether that borrowing was quality borrowing in the sense borrowing for quality expenditure or not borrowing is on their balance sheet she saidAs a result looking at getting some kind of a control over fiscal deficit will be a challenge for most countries If not a drastic control over it gradually at least there should be measures to bring the fiscal deficit to some reasonable number This is the kind of picture which has emerged and I quite agree with it because we India are growing fast on the back of one domestic marketWe have a challenge also in that we still have quite a few imports coming But with the commensurate increase in exports not happening because our traditional export geographies are not really picking up we have a challenge which is more external than internal the minister saidResponding to a question Sitharaman said India is trying to grow at the fastest possible rate But what I would counter pose a question what is holding the investors back Why do global investors going by the textbook where economic activity is good and robust and dynamic money flows there is the normal textbook assumption I want to ask where are the investable funds where are the investors why are they looking at what are they looking at Whats holding them back So thats a question I like to pose she saidEven as I pose that question I must recognise that India has received quite an appreciable number of FDIs So thats not to say nothing comes to India Yes it is coming But with that coming I still would think theres more opportunity lying and with all the conversation being China plus one shared values democracies English speaking demographic dividend with skill sets of Indian young being so good that they are manning the GCCs of the world located in India and GCCs of the world located outside So the question would be whats holding it back she askedI dont think anything is holding the Indian economy back The policies are working Reforms are still happening and it shall continue to happen Greater liberalisation of the economy will be there We are accessing newer and newer friends and also speaking more about Indian economy in more revenues more platforms that will probably be even better attractive for investors Sitharaman saidThis story has been sourced from a third party syndicated feed agencies Midday accepts no responsibility or liability for its dependability trustworthiness reliability and data of the text Midday managementmiddaycom reserves the sole right to alter delete or remove without notice the content in its absolute discretion for any reason whatsoever