Reserve Bank of India (RBI) Governor Shaktikanta Das has listed out a set of challenges for the global economy, which, he said, is moving towards a new and unsettling phase.
“Solutions are turning difficult to come by as global economy seems to be moving into a new and unsettling phase in an environment of stressed trade negotiations, rising geopolitical confrontation and limited policy space, and high debt levels in several economies,” Das said at an event here on Friday.
“General government debt of advanced economies as a group has surpassed 100 per cent of GDP. Fiscal space is also constrained in many of the advanced economies,” he added.
In light of the challenges that lie ahead for the economy, Das said monetary and fiscal policies need to be well-calibrated to support growth.
“It is important, in the backdrop of slowing global growth, that policies of monetary and fiscal authorities are well-calibrated so they support growth without further build-up of leverage and asset price bubbles. Prudent policies are critical to growth with macroeconomic stability,” he said.
Das also said globally, there is a need to focus on policy space, judiciously use it and simultaneously take structural reforms to undertake productivity, innovation and job creation.
The central bank governor also said how the International Monetary Fund (IMF) and central banks provide guidance will be the key to sustaining global economic growth while maintaining financial stability.
“The coming year will test the IMF for its policy advice on these areas,” he added.
Das was speaking at the launch of a book titled ‘India’s Relations with International Monetary Fund’ authored by V Srinivas.