Click here to visit
Davos 2020: IMF slashes India's GDP growth rate, but Harvard's Rogoff expects 6% rise
January 22, 2020

Davos 2020: IMF slashes India's GDP growth rate, but Harvard's Rogoff expects 6% rise

Gross domestic product (GDP) growth in the range of 6 percent in India is a reasonable expectation, said Kenneth Rogoff, economics professor at Harvard University, in an interview with CNBC-TV18 at the World Economic Forum in Davos.

The International Monetary Fund (IMF) on Monday slashed India's GDP growth rate by 130 basis points to 4.8 percent for FY20. Earlier, the IMF chief economist Gita Gopinath in an interview with CNBC-TV18 said that economic revival is not expected before the first half of FY21.

However, Rogoff said that his opinion differs from Gopinath's.

“I somewhat differ to my colleague Gita Gopinath who is the chief economist now at the International Monetary Fund and I think their story is that there have been some adjustments for example not only to demonetisation but the way the goods and services tax (GST) was introduced that probably will smooth out over time," Rogoff said.

"I think there is most of the forecast and it sounds reasonable to me that growth will be more in the 6 percent range in the year going forward. The long-term trajectory is very positive.”

About key disruptions that could have an impact on the global economy, Rogoff said: “I think there are actually a lot of outside risks but very serious risks. Just simple things having to do with if there is a recession, the major central banks, countries don’t have as much ammunition. So yes, the risks of the recession, I would say, are not hugely elevated. I think people here see very little risk.

"There are big risks out there. Let us take one they might think about — [US President Donald] Trump may get re-elected — but it could be a very different policy that might not be so friendly to the stock market. There is at least a 20 percent chance that a very progressive democratic candidate wins and suddenly they are going to be in tears when they wake up to that.

"China has — on a downward trajectory — they smooth out at the end of next year but they might not. Europe is not very robust and I would say maybe the most likely risks are emerging markets where debt is going upwards and growth is going downwards."