7% growth not coming with enough jobs, says IMF's Gita Gopinath
(This story originally appeared in on Aug 16, 2024)
IMF’s first deputy managing director Gita Gopinath, who is in India, spoke to TOI on a range of issues from the global crisis to AI and the need to create jobs. Excerpts:
How do you see wars and crises affecting the world and India?
In the last few years, we have seen a big rise in geo-political uncertainty, that’s a reflection of the conflicts, Russian invasion of Ukraine, conflicts in the Middle East (West Asia). More generally, because of the pandemic and the war there has been a rethinking by countries of what should be the rules of engagement. It’s not always efficiency driven, but also driven by resilience, national security concerns. This is a very different environment from what we have lived in over the last three decades in terms of global integration.
In the short term, the energy crisis that came after the war and the food insecurity fed into much higher cost of living in countries. But given that these conflicts remain, we could see a further increase, for example, in oil prices, which will have negative implications for many countries, including for India. The other aspect is just uncertainty. We are in a year of elections that brings a lot of uncertainty on the policy front. And uncertainty has a bit of a chilling effect on investments.
Trade fragmentation is a serious concern. In 2022 and 2023 there were around 3,000 new trade restrictions that were put in place. We are seeing a lot of industrial policies in countries that are also tied to trade
