India has warned against the risks of low and negative interest rates and "significant loan impairments" to global financial stability. Finance Minister Arun Jaitley also called for the "deleveraging" (reduction) of private debt to boost economic growth, PTI reported on Sunday.
The "disorderly deleveraging of private debt" could affect growth, Jaitley said at the annual summit of the International Monetary Fund and the World Bank in Washington. He added that growing populism and isolationist movements could lead to a deterioration in global trade, and that international efforts were needed to improve trade to boost global growth.
"Emerging market and developing economies as a whole have performed better than the advanced economies," Jaitley said. "However, the outlook in these economies remains uneven and generally weaker than in the past due to challenging macroeconomic conditions." The finance minister further said that India was registering good economic growth as compared to the rest of the world, and that the country has become "far more aspirational than ever before".
Jaitley's remarks come days after the IMF said India's gross domestic product will grow by 7.6% in 2016-'17. The IMF said the upward revision from its July estimate of 7.4% was because of a growth momentum in the country as well as the economy's resilience. In July, the body had cut its forecast for global growth by 0.1%, citing an increase in political and institutional uncertainty following the Brexit vote.
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