The World Economic Outlook 2022 by IMF has been published and cut its forecast for India’s Gross Domestic Product (GDP) growth in FY 2022-23 to 8.2%, making it the fastest-growing major economy in the world, almost twice faster than China’s 4.4 %.
The war in Ukraine has triggered a costly humanitarian crisis that demands a peaceful resolution. At the same time, economic damage from the conflict will contribute to a significant slowdown in global growth in 2022 and add to inflation. Fuel and food prices have increased rapidly, hitting vulnerable populations in low-income countries hardest.
International Monetary Fund (IMF)
- IMF is an international financial organization established to foster global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth, and reduce poverty around the world.
- 44 founding member countries sought to build a framework for international economic cooperation. Today, its membership embraces 190 countries, with staff drawn from 150 nations.
- 1944: The IMF was planned as a part of the Bretton woods exchange system along with the World Bank.
- IMF and World Bank are together known as the Bretton wood twins.
It was set in the aftermath of World War II when the global economic scenario collapsed and countries sharply raised barriers to trade in an attempt to improve their failing economies.
The IMF is governed by and accountable to the 189 countries that make up its near-global membership. It has headquarters in Washington D.C.
India joined on 27th December 1945.
The International Monetary Fund (IMF) has the primary purpose to ensure the stability of the international monetary system, the system of exchange rates, and international payments that enables countries to transact with each other.
The Bretton Woods exchange rate system prevailed collapsed in 1971 when the United States government suspended the convertibility of the US (and dollar reserves held by other governments) into gold. This is known as the Nixon Shock.
Organization of International Monetary Fund (IMF):
At the top of its organizational structure is the Board of Governors. The day-to-day work of the IMF is overseen by its 24-member Executive Board, which represents the entire membership and is supported by IMF staff.
The Managing Director is the head of the IMF staff and the Chair of the Executive Board. She/he is assisted by four Deputy Managing Directors.
Lending: The IMF provides loans—including emergency loans—to member countries experiencing actual or potential balance of payments problems. The aim is to help them rebuild their international reserves, stabilize their currencies, continue paying for imports, and restore conditions for strong economic growth while correcting underlying problems.
The IMF monitors the international monetary system and global economic developments to identify risks and recommend policies for growth and financial stability. The Fund also undertakes a regular health check of the economic and financial policies of its 190 member countries. In addition, the IMF identifies possible risks to the economic stability of its member countries and advises their governments on possible policy adjustments.
The IMF provides technical assistance and training to governments, including central banks, finance ministries, revenue administrations, and financial sector supervisory agencies. These capacity development efforts are centered on the IMF’s core areas of expertise ranging from taxation through central bank operations to the reporting of macroeconomic data. Such training also helps countries tackle cross-cutting issues, such as income inequality, gender equality, corruption, and climate change.