FM Sitharaman says V-shaped recovery seen in high-frequency indicators at IMF meet

Finance Minister Nirmala Sitharaman said a V-shaped pattern of recovery in the economy is being seen in several high-frequency indicators and expressed confidence in the government's stimulus measures to support a sputtering economy amid the Coronavirus crisis.

Speaking at the virtual plenary meeting of the International Monetary and Financial Committee (IMFC), the ministerial-level committee of the IMF, Sitharaman briefly outlined the measures under the 'AtmaNirbhar Bharat' package to foster a quick and more robust economic recovery in India.

India is headed to post its first annual GDP contraction in over four decades as the pandemic-triggered health crisis and months-long stringent lockdown punctured the wheels of growth.

Citing improved factory activity as the PMI reached the highest level in the last eight years in September, Sitharaman presented a strong recovery prospect for the manufacturing sector. The IHS Markit India Manufacturing PMI surged to 56.8 in September, the highest since January 2012, from 52.0 in August. The 50 mark separates growth from contraction.

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The discussions at the meeting were based on IMF Managing Director’s Global Policy Agenda titled “Catalyzing a Resilient Recovery”. The members of the IMFC updated the committee on the actions and measures taken by member countries to combat COVID-19 and its adverse impacts, the Finance Ministry said.

Sitharaman also complimented IMF’s Managing Directo Kristalina Georgieva and the IMF for providing wise counsel to the economies across the globe and felt that IMF’s assertion that a premature withdrawal of policy support could trigger liquidity shortfalls and insolvencies, is relevant.

Several low-income and developing countries are confronted with the challenge to protect and ensure livelihood for millions slipping below the poverty line. Sitharaman mentioned that recovery and rehabilitation efforts in these countries must not be allowed to be undermined in any manner.

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