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<keyword id="22195" type="General" weightage="20" keywordseo="Inflation" source="Orion">Inflation</keyword> is likely to have reached its peak in 2022 but there is no end in sight for the <keyword id="533011" type="General" weightage="20" keywordseo="cost-of-living" source="Orion">cost of living</keyword> crisis, experts said on Tuesday. Speaking at a panel discussion during the World Economic Forum Annual Meeting 2023, they said those on low income and in the developing world will be grappling with high prices for years to come. <keyword id="154034" type="General" weightage="50" keywordseo="gita-gopinath" source="Orion">Gita Gopinath</keyword>, Deputy Managing Director of the <keyword id="6366068" type="General" weightage="80" keywordseo="international-monetary-fund" source="Orion">International Monetary Fund</keyword>, said, "we do believe that, in terms of headline inflation for the global economy, we think it peaked in 2022." Participants agreed that inflation is inextricably linked to the cost of living crisis and tackling inflation is key to easing the cost crunch in the long run. However, <keyword id="60820" type="General" weightage="80" keywordseo="gopinath" source="Orion">Gopinath</keyword> warned, "even if inflation comes down, prices are high because we don't have deflation, we have lower levels of inflation. The prices have gone up. How much of an impact that has had on households and on consumption varies across countries." German Finance Minister <keyword id="1084060" type="General" weightage="50" keywordseo="christian-lindner" source="Orion">Christian Lindner</keyword> highlighted his country's 200 billion euro "economic shield" mobilised to protect consumers from the cost of living crisis but said that he expects the country might not need the full amount. "The price levels are lower than we expected. We have fewer hardship cases, and so my expectation is that we won't need the whole protective shield of two hundred billion, which is good news," he said. According to him, on top of protecting the society's most vulnerable, the sections in the middle also need shielding from the cost of living crisis. "From the German, European, perspective, we are doing a lot for the most vulnerable, paying welfare subsidies. But we have to ask: what can we do to stabilise the qualified people who are working hard, playing by the rules?". "A renaissance of competitiveness, so that our companies are able to pay their wages... we have to reform the electricity market, we have to reduce the burdens, for example, in taxation, we have to improve the framework conditions for our SMEs (Small and Medium-sized Enterprises) in Germany and all of these supply-side measures," the minister said. The panel also agreed that the knee-jerk reaction of the "re-shoring" industry in response to the supply chain shock of the COVID pandemic must be averted if inflation and the cost of living crisis are to be tackled effectively. Giving the perspective from business, Unilever CEO Alan Jope said the "fragmentation of supply chains is frankly another inflationary pressure in this economy" and warned more generally of the dangers of inequality. "The cost-of-living crisis disproportionately impacts those at the bottom of the pyramid. There is so much talk about tightening rates, and about stimulus spending, I think the only way to break the long-term trend of rising inequality is productivity," he added. He explained that Unilever has increased the wages it pays to its own workers, imploring others to do the same. Laura D'Andrea Tyson, Professor of Economics at the University of California, Berkeley, also highlighted the fundamental issue of wages. "I almost want to say, without calling it a cost of living crisis, let's call it what existed before, and that is a living wage crisis for many people." She also suggested tackling long-standing issues around planning and approvals for housing -- in order to build more stock and bring down prices -- and addressing the climate crisis and utilising technology would aid the global response to inflation. In closing, IMF's Gopinath cautioned that any meaningful moves to bring down inflation will likely mean rising unemployment. "We are at record low unemployment rates in the US and the euro area. Everything we know about our monetary policy when you tighten interest rates is for the unemployment rate to go up." "That is how you bring down inflation," she added. SEE ALSO: <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/business/news/sebi-slaps-final-hearing-notices-to-9-missing-entities/articleshow/97171426.cms">SEBI slaps final hearing notices to 9 'missing' entities</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/business/news/jsw-steel-q3-net-profit-falls-over-85-to-474-crore/articleshow/97174189.cms">JSW Steel Q3 net profit falls over 85 % to ₹474 crore</a>

Inflation may be past peak but cost of living crisis is far from over, say experts

<ul class="summary-list"><li>Argentina devalued its peso by 54% on Tuesday, sending the official rate to 800 per US dollar.</li><li>President Javier Milei has committed to radical policy shocks to get the economy on better footing.</li></ul>Argentina President Javier Milei is starting to deliver on his commitment to radical economic changes.The administration devalued the currency by 54%, with Economy Minister Luis Caputo announcing Tuesday that the peso's official exchange rate would weaken from 366.5 per dollar to 800 pesos per dollar.It's a step for Argentina to break its "addiction" to fiscal deficits, Caputo said.Moving forward, the central bank will target ongoing weakening of 2% per month, while Milei's government will pull back on spending equal to about 2.9% of GDP, according to <a href="https://www.bloomberg.com/news/articles/2023-12-12/argentina-s-milei-devalues-peso-by-54-in-first-batch-of-shock-measures" target="_blank" rel="noopener">Bloomberg</a>. Those will include reductions in pension plans and social security, as well as subsidies. Milei has warned of a brutal few months ahead for Argentines amid new radical economic measures. The country is currently facing <a href="https://www.businessinsider.com/dedollarization-dollar-dominance-currencies-javier-milei-argentina-economic-shock-recession-2023-12?_gl=1*tda4z4*_ga*MjA5NTAyMzYyOS4xNjYyNDcwMDc5*_ga_E21CV80ZCZ*MTcwMjQ5MTc5My4xNDYyLjAuMTcwMjQ5MTgxOS4zNC4wLjA.#:~:text=Argentinian%20inflation%20hit%20143%25%20in,to%20avoid%20such%20a%20catastrophe.%22?utm_medium=ingest&amp;utm_source=markets">triple-digit inflation</a>, and prices are still expected to jump an additional 20%-40% in the months ahead.Meanwhile, the <a href="https://www.imf.org/en/News/Articles/2023/12/12/pr23441-imf-spokesperson-statement-on-argentina" target="_blank" rel="noopener">International Monetary Fund</a> applauded Argentina's new initiatives, saying they will help stabilize the economy and allow for more private-sector-led growth."These bold initial actions aim to significantly improve public finances in a manner that protects the most vulnerable in society and strengthen the foreign exchange regime," the IMF said in a statement Tuesday.But while Milei campaigned on ditching the peso completely and adopting the dollar as Argentina's currency, his naming of more conventional officials to key economic policy jobs raised doubts about some of his most radical plans.Nobel laureate economist Paul Krugman, for his part, said on Tuesday Argentina <a href="https://markets.businessinsider.com/news/currencies/dollarization-argentina-dollar-dominance-inflation-debt-economy-recession-paul-krugman-2023-12">can't escape its massive inflation dilemma</a> with a simple switch from the peso to the dollar. "I don't pretend to understand what's currently happening in Argentine politics," the economist said in an column for the New York Times. "But the fact that many people apparently believed that dollarization would solve Argentina's problems was just the latest example of the enduring power of magical monetary thinking."

Argentina devalues the peso by 54% as it kicks off radical economic reform plan

<ul><li>The World Trade Organisation (WTO), the <keyword id="6354424" type="COMPANY" weightage="20" keywordseo="world-bank">World Bank</keyword>, and the <keyword id="6366068" type="COMPANY" weightage="20" keywordseo="international-monetary-fund">International Monetary Fund</keyword> (IMF) all came together to ask for urgent reforms in international trade. </li><li>In a joint report, the institutions focused on modernising the WTO regulations to focus on the digital arena in order to ‘harness the unique strength’ of the organisation in changing times. </li><li>The Director General of the WTO, has earlier stated that the current global trade tensions have the potential to undermine the economic order that was established after <keyword id="6357515" type="UNKNOWN" weightage="20" keywordseo="World-War-II">World War II</keyword>.</li></ul>The functions of the World Trade Organisation (WTO), International Monetary Fund (IMF) and the World Bank may vary, but the three institutions came together to publish a joint report expressing the urgency to reform international trade. They expressed the importance of ‘harnessing the unique strength of the WTO’ by focusing on global e-commerce regulations, improved negotiating mechanisms, and increased transparency in trade policies around the world. The report titled, ‘<a href="https://www.imf.org/en/Publications/Policy-Papers/Issues/2018/09/28/093018-reinvigorating-trade-and-inclusive-growth">Reinvigorating Trade and Inclusive Growth</a>’ comes right after the president of the United States, <keyword id="6354484" type="PERSON" weightage="20" keywordseo="Donald-Trump">Donald Trump</keyword>, harshly questioned America’s involvement in global institutions like the WTO. The question for India Ordinarily, the WTO has seven judges in its Dispute Settlement Court, but currently, only four are in positions of appointment. Reports indicate that the US has been blocking more people from coming on board. If the number of judges gets any lower, the WTO won’t have enough people on the panel to deliver rulings. It’s <a href="https://www.dailyo.in/business/wto-donald-trump-trade-wars-world-bank-agriculture-subsidies/story/1/26544.html">popular</a> opinion is that the organisation is currently failing its role and being used as an instrument for retaliatory tariff wars. The question for India is a little more complicated than just being protectionist or pro-globalisation because the WTO, though a global institution, has often been accused of being biased against developing nations. Last year India even <a href="https://www.livemint.com/Politics/z5KwdAVralEF8wAsSxfTaL/India-accuses-WTO-of-raking-up-new-issues.html">told the WTO</a> that, “Such presentations by the secretariat within or outside the WTO go far beyond the remit of the functions of the WTO secretariat, and violate the letter and spirit of the agreement establishing the WTO,” when the organisation was seeking outcomes on e-commerce and investment facilitation initiatives. Director General, Roberto Azevedo, had earlier <a href="https://www.businessinsider.in/The-man-in-charge-of-overseeing-global-trade-says-the-first-shots-have-been-fired-in-a-trade-war-and-the-situation-is-extremely-serious/articleshow/65344601.cms">warned</a> world leaders that the current trade tensions have the potential to cause great harm to the world economy and it undermines the trading order that was established after World War II. The ripple events will cause job loss and hit economic growth, with the under-developed and developing nations bearing the brunt.

Three of the world’s leading financial institutions band together for international trade reforms

<ul class="summary-list"><li>Increasing taxes on the wealthy and corporations could help the global <keyword id="34412" type="ORGANIZATION" weightage="100" keywordseo="economy">economy</keyword> rebound.</li><li>That's according to officials at the <keyword id="6366068" type="ORGANIZATION" weightage="60" keywordseo="international-monetary-fund">International Monetary Fund</keyword>, who say it could level playing fields.</li><li>This further cements the <keyword id="6355408" type="DEFINITION" weightage="60" keywordseo="imf">IMF</keyword>'s shift toward progressive economics, as <keyword id="9090351" type="UNKNOWN" weightage="60" keywordseo="wealth-taxes">wealth taxes</keyword> grow in popularity.</li></ul>Lifting taxes on wealthy individuals and corporations could improve the global rebound from the coronavirus recession, officials at the International Monetary Fund said Wednesday.New stimulus and an improved rate of vaccination led the IMF to <a href="https://www.businessinsider.com/economic-outlook-gdp-global-growth-vaccines-stimulus-recovery-uneven-imf-2021-4">raise its global growth forecast</a> earlier in the week, but the organization is already looking beyond the initial rebound. Governments will eventually need to retract their fiscal support to avoid possible debt risks. Balancing stimulus with austerity will be a key challenge in the coming years, and reforming both domestic and international taxes can help bring about a more equitable and environmentally friendly economy, the IMF said."To help meet pandemic-related needs, a temporary COVID-19 recovery contribution levied on high incomes is an option," a team led by Vitor Gaspar, director of the fiscal affairs department at the IMF, said. "Over the medium term, revenue collection should be bolstered, especially in low-income developing countries, which could help finance development needs."The contribution could emerge as a surcharge on the personal income tax or the corporate income tax, Gaspar said in comments to reporters, according to <a href="https://www.bloomberg.com/news/articles/2021-04-07/imf-says-wealth-tax-corporate-taxes-can-help-virus-recovery?sref=BLKWHazc">Bloomberg</a>.The statement marks a major contrast with past IMF statements. The organization previously preached the neoliberal themes of cutting government spending and lowering taxes as ideal for economic growth. Critics have often accused the IMF of pushing austerity that stifled growth, particularly in developing economies.The institution's tone changed after the global financial crisis, and this marks further evolution on its part. The IMF stressed its mixed outlook for the recovery in emphasizing the need for greater tax revenue. The organization now sees the global economy <a href="https://www.businessinsider.com/economic-outlook-gdp-global-growth-vaccines-stimulus-recovery-uneven-imf-2021-4">expanding 6% in 2021</a>, up from the previous estimate of a 5.5% bounce. Growth in 2022 was also revised higher in the IMF's latest outlook report. Hefty <keyword id="3906221" type="PERSON" weightage="60" keywordseo="fiscal-stimulus">fiscal stimulus</keyword> - particularly in advanced economies - will help the pandemic recession leave smaller scars than the financial crisis, the IMF said.Yet emerging economies and those with less flexibility in passing fiscal stimulus are lagging their larger peers, the organization added. The IMF estimates that 95 million more people fell into extreme poverty last year than would have without a pandemic.The world economy's plodding rebound from the 2008 downturn led the IMF to accept it had underestimated the importance of <keyword id="6415009" type="UNKNOWN" weightage="60" keywordseo="fiscal-policy">fiscal policy</keyword> in driving growth. Now, with major economies erring on the side of overfilling the hole in the economy, the IMF has called for prolonged fiscal support in tandem. Tax hikes, as well as health care investments and employment programs, can help even the playing field between large and still-struggling economies, the organization said."Governments have gone to exceptional lengths to shore up their economies, but further work is needed to get ahead of the COVID-19 pandemic, provide flexible yet targeted support now, adjust when a recovery is firmly in place, and set the stage for a greener, fairer, and more durable recovery," the IMF said."Until the pandemic is brought under control, however, fiscal policy will have to remain flexible and supportive," the IMF said Wednesday.<h2>One-off wealth taxes have gained traction worldwide</h2>A <keyword id="46812" type="COMPANY" weightage="60" keywordseo="Wealth-Tax">wealth tax</keyword> to address the fallout of the coronavirus pandemic isn't necessarily a remote possibility. In fact, Argentina has <a href="https://www.businessinsider.com/argentina-millionaire-tax-passed-cover-cost-of-covid-19-supplies-2020-12">already passed</a> a one-off millionaire tax, which would target the top 0.8% of the population. It could raise up to $3 billion, <a href="https://www.bbc.com/news/world-latin-america-55866715">according to the BBC</a>, and will help pay for COVID relief measures.In December, a panel of experts also called for a one-off wealth tax in the UK. Their proposal was a simple 1% tax for five years on individual wealth over £500,000. That <a href="https://static1.squarespace.com/static/5ef4d1da53822a571493ebd0/t/5fd0a2a026d54b3c06d6ff67/1607508643546/A-Wealth-Tax-For-The-UK.pdf">Wealth Tax Commission</a> found that such a levy could raise just around £260 billion (around $357 billion). It's not without precedent, as the UK has had one-off taxes before, although that proposal might meet resistance from the <a href="https://www.reuters.com/article/uk-health-coronavirus-britain-tax/one-off-wealth-tax-might-help-fix-covid-hit-to-uk-budget-lawmaker-idUSKBN2AF0K6">UK's Conservative Party</a>.In the US, there's Sen. Elizabeth Warren's <a href="https://www.businessinsider.com/democrats-propose-ultra-millionaire-tax-on-wealthiest-americans-2021-3">Ultra-Millionaire Tax Act</a>. It targets households with a net worth between $50 million and $1 billion, who would see a 2% tax, and those with a net worth over $1 billion would be taxed 3%. That's not a one-off measure, but it could raise <a href="https://www.businessinsider.com/wealth-tax-would-have-raised-114-billion-elizabeth-warren-2020-2021-3">$1.4 trillion over 10 years</a>.Some of the ultrawealthy who would have to pay up have asked for their taxes to be increased. In July 2020, <a href="https://www.businessinsider.com/millionaires-ask-tax-them-more-fund-coronavirus-recovery-2020-7">83 millionaires</a> around the world asked their governments to tax them more in an effort to offset the pandemic's economic damages.

IMF backs new taxes on corporations and the wealthy, furthering organization's historic shift

India would now be joining the US, Japan, Germany and France at the <keyword id="6366068" type="ORGANIZATION" weightage="100" keywordseo="INTERNATIONAL-MONETARY-FUND">International Monetary Fund</keyword>'s top table. The world’s largest democracy would also be joined with three other emerging markets; this has happened after the multilateral institution said yes to the much-delayed quota reforms on Wednesday. 
 These changes, which were pending since 2010, has made India stand among the top largest 10 members of the <keyword id="6355408" type="ORGANIZATION" weightage="100" keywordseo="IMF">IMF</keyword>, along with Italy and the UK, as well as fellow newcomers, Brazil, China and Russia. 
 
In the last IMF-World Bank meeting which was held at Lima, Peru, in October last year, India’s finance minister Arun Jaitley had strongly asked for early implementation of these changes. 
 
The reforms recommended that in order for developing countries to be better represented, they needed a 6% shift in quotas in their favour. These changes would raise India's vote share to 2.69% from the current 2.34%. 
 
"These reforms will ensure that the Fund is able to bet-ter meand represent the needs of its members in a rapidly changing global environment," IMF managing director Christine Lagarde said in his official statement. "Today marks a crucial step forward and it is not the end of change as our efforts to strengthen the IMF's governance will continue." 
 
As per the IMF, the changes aim to make better the governance and reflect the increasing role that dynamic emerging markets and developing countries have in the world economy. 
 
"The entry into force of these reforms will reinforce the credibility, effectiveness, and legitimacy of the IMF," said the release. "For the first time, four emerging market countries (Brazil, China, India, Russia) will be among the 10 largest members of the IMF." 
 
<a href="http://fm.cnbc.com/applications/cnbc.com/resources/img/editorial/2014/10/06/102064081-RTXYQYK.1910x1000.jpg">Image source</a>

India gets more voting rights as IMF reforms quota

<div class="KonaFilter image-container display-table float_right"><div><div class="image on-image"><a href="http://markets.businessinsider.com/index/us-dollar-index">Markets Insider</a></div></div></div>The dollar is ticking higher on Monday.The <a href="http://markets.businessinsider.com/index/us-dollar-index">US dollar index</a> was up by 0.3% at 93.99 at 8:51 a.m. ET.The dollar "is enjoying modest gains against most currencies as prospects of both tax reform and additional monetary tightening by the Fed carry over from last week," Marc Chandler, global head of currency strategy at Brown Brothers Harriman, <a href="http://www.marctomarket.com/2017/10/us-dollar-starts-new-week-on-firm-note.html">said in commentary</a>."The Dollar Index is flirting with important resistance in the 94.00-94.25 area, which corresponds with a neckline of a bottoming pattern that would project toward 97.00, where the 200-day moving average is presently found," he continued. "The 97.40 area matches the 50% retracement of this year's decline."The index is down about 7% since President Donald Trump's inauguration.As for the rest of the world, here was the scoreboard at 8:54 a.m. ET:<ul><li>The <a href="http://markets.businessinsider.com/currencies/USD-jpy">Japanese yen</a> was down by 0.2% at 113.80 per dollar. Prime Minister Shinzo Abe's coalition won more than two-thirds of the 465 seats that were up for grabs in <a href="http://markets.businessinsider.com/news/stocks/stock-market-news-opening-bell-october-23-2017-2017-10-1005322723">Sunday's parliamentary election</a>.</li><li>The <a href="http://markets.businessinsider.com/currencies/USD-inr">Indian rupee</a> was up by 0.2% at 65.015 per dollar. Still, the currency has been falling over the past few weeks and recently hit a six-month low against the US dollar. "Looking ahead, the currency could weaken a little more," Shilan Shah, India economist at Capital Economics, said in a note to clients. "But India's reasonably strong external position means that any further depreciation in the rupee is likely to be slight and gradual."</li><li>The <a href="http://markets.businessinsider.com/currencies/USD-rub">Russian ruble</a> was little changed at 57.4800 per dollar, while <a href="http://markets.businessinsider.com/commodities/oil-price?type=Brent">Brent crude oil</a>, the international benchmark, was down by 0.3% at $57.56 per barrel.</li><li>The <a href="http://markets.businessinsider.com/currencies/eur-usd">euro</a> was weaker by 0.4% at 1.1734 against the dollar.</li><li>The <a href="http://markets.businessinsider.com/currencies/gbp-usd">British pound</a> was little changed at 1.3175 against the dollar.</li></ul> <div class="margin-top"> <h3>NOW WATCH: <a href="http://www.businessinsider.com/the-bottom-line-market-warning-bitcoin-debate-facebook-amazon-google-tesla-uber-2017-10">THE BOTTOM LINE: A market warning, the big bitcoin debate and a deep dive on tech heavyweights</a></h3> <div> </div> </div>

The US dollar is ticking higher on the 'prospects of both tax reform and additional monetary tightening by the Fed'

In the first week of 2019, <keyword id="154034" type="PERSON" weightage="20" keywordseo="Gita-Gopinath">Gita Gopinath</keyword> took over as the <keyword id="69755" type="POSITION" weightage="20" keywordseo="Chief-Economist">chief economist</keyword> of the <keyword id="6366068" type="COMPANY" weightage="20" keywordseo="international-monetary-fund">International Monetary Fund</keyword> (<keyword id="6355408" type="DEFINITION" weightage="20" keywordseo="imf">IMF</keyword>), the international body responsible for ensuring the financial stability of developing countries. Prior to stepping into the role, the Indian-born Gita Gopinath was a tenured economics professor at Harvard. She was appointed to succeed Maurice Obstfeld in October last year. Obstfeld retired on 31 December. As an expert on trade, exchange rates, monetary policy and public debt, Gopinath will be tasked with adapting the IMF’s role in a world beset by an emerging market crisis and unconvinced by the supposed benefits offered by globalisation. Here are five things you should know about her:- She follows in the footsteps of a former <keyword id="30067" type="ORGANIZATION" weightage="20" keywordseo="RBI">RBI</keyword> governor Gopinath is the second Indian to be take over the role of chief economist after <keyword id="6358908" type="PERSON" weightage="20" keywordseo="raghuram-rajan">Raghuram Rajan</keyword>, who was the governor of the Reserve Bank of India from 2013 to 2016. Rajan was named the IMF’s chief economist in 2003 before leaving the organisation in 2006 to join India’s finance ministry as its chief economic advisor. Gopinath’s appointment has led to speculation that she could one day be considered for the top job at India’s central bank. She is the first woman to head the IMF’s research department In addition to being the IMF’s Economic Counsellor, Gopinath will be director of the body’s research department - becoming the first woman to do so. The department is crucial to the IMF’s functioning as it monitors the global economy and policies of member countries and is also tasked with publishing the <keyword id="188983" type="COMPANY" weightage="20" keywordseo="World-Economic-Outlook">World Economic Outlook</keyword> every year. She was a critic of the Modi government’s demonetisation initiative Like Rajan, who said demonetisation “was not a well-thought out exercise”, Gopinath was also vocal in her criticism of the move. In <a href="https://www.business-standard.com/article/economy-policy/not-a-single-macro-economist-thinks-note-ban-was-a-good-idea-gita-gopinath-117122101525_1.html">an interview </a>with Business Standard in December 2017, she went on record to say that demonetisation wasn’t a good idea and the government should have spent more time refining its plans to implement the goods-and-services tax (GST) regime, a reform that she supported. She added that she didn’t know any macroeconomists who thought the note ban was useful. India’s balance of payments crisis in 1991 shaped her academic interests Before moving to America for her Masters and PhD in economics, Gopinath pursued her undergraduate and graduate degrees in economics from Lady Shri Ram College and the Delhi School of Economics. Her time at Delhi University coincided with India’s balance of payments crisis in 1990-91 and this inspired her to pursue her interest in international finance. The crisis, which stemmed from a ballooning of imports in the mid-80s, saw India battle the problem of a fiscal deficit as well as a trade deficit. Faced with a shortfall in its foreign exchange reserves, the government received an emergency loan from the IMF to cover its spending obligations, pledging its gold reserves as collateral. The move led to the liberalisation of the Indian economy. She was the economic advisor to the chief minister of Kerala Between 2016 and 2018, Gopinath has been advising Kerala’s CM, Pinarayi Vijayan, on economic affairs, having reportedly made recommendations on skill development and healthcare. Till date, this is the only role she has taken one that has required her to directly advise a central or state government. Her appointment, however, was the subject of controversy given that her free-market beliefs were in opposition to the ideals of Kerala’s left-wing parties. For example, in January 2018, she flagged the state’s growing welfare expenditure as a potential budgetary concern.

India's Gita Gopinath just took over as the chief economist of the IMF— here are 5 things you should know about her

<ul><li>Between April and June 2018, foreign investors withdrew ₹610 billion from India’s capital markets. </li><li>However, a renewed confidence in India’s <keyword id="34412" type="ORGANIZATION" weightage="20" keywordseo="economy">economy</keyword> has culminated in a back-to-back monthly inflows in July (₹23 billion) and August (₹52 billion). </li><li>The rebound follows an improvement in macro-economic <keyword id="42546" type="PERSON" weightage="20" keywordseo="Growth">growth</keyword> indicators and corporate earnings as well as a positive report from the IMF in early August. </li></ul>In terms of foreign portfolio investment, 2018 hasn’t been a great year for India. In the first six months of the year, the country experienced its highest level of investment outflows <a href="https://economictimes.indiatimes.com/markets/stocks/news/fpis-outflow-hits-10-year-high-at-rs-48000-crore-in-h1-2018/articleshow/64813079.cms">in ten years</a>, largely due to the fact that investors withdrew ₹610 billion from April to June. The reasons for this had to do with a pessimistic view of India’s short-term growth trajectory, as indicated by a depreciating currency, a widening fiscal deficit, rising oil prices and concerns of a global trade war. A gradual tightening of interest rates in the US has also rerouted inflows back to this safe haven. However, in the last few months, it seems that these worries have subsided slightly. A renewed confidence in India’s economy has culminated in a back-to-back monthly inflows in July and August. Following a net positive flow of ₹23 billion in July, foreign portfolio investors pumped ₹52 billion into India’s capital markets in August - 65% of which went into bonds and <keyword id="44647" type="ORGANIZATION" weightage="20" keywordseo="debt">debt</keyword> instruments, with the rest going into the stock market. The rebound follows an improvement in macro-economic growth indicators and corporate earnings as well as a positive report from the <keyword id="6366068" type="ORGANIZATION" weightage="20" keywordseo="international-monetary-fund">International Monetary Fund</keyword> (IMF) in early August. The IMF gave its stamp of approval to reforms such as improvements to the GST regime and easing of <keyword id="46757" type="ORGANIZATION" weightage="20" keywordseo="foreign-investment">foreign investment</keyword> protocols. It maintained its medium-term growth forecast for India at 7.8%, which will make it the world’s fastest-growing major economy. The reversal in inflows also coincides with a bull run in India’s <keyword id="6391506" type="UNKNOWN" weightage="20" keywordseo="Equity">equity</keyword> markets. The Sensex has been on a record spree since July as domestic institutional investors have filled in the demand gap caused by the exodus of foreign investors. However, while a rebound in foreign portfolio investments bodes well for India’s short-term prospects, the quantity of inflows still aren’t sizeable to sufficiently stem the rupee’s decline. However, this is also a symptom of a larger currency crisis in emerging markets, most notably Turkey and Argentina, and a renewed interest in safe haven markets. While there is a still a significant amount of wariness among foreign investors, India’s recent quarterly growth figures - an 8.2% GDP growth in Q1 - and a burgeoning market for stressed assets could result in larger inflows in September. In addition, the Indian government’s move to further ease the foreign investment process by introducing <a href="https://www.business-standard.com/article/economy-policy/govt-makes-fpi-s-job-easier-introduces-single-form-for-foreign-investors-118082600172_1.html">a single common application form</a> will make it easier for foreign investors to register themselves and invest in debt and equity instruments.

After a terrible start to the year, India’s foreign investment inflows have finally rebounded

A new report by the the research arm of the State Bank of India (SBI), India’s largest bank, has a number of calls to action to its parent - the Indian government - some of which are put forth in an irreverent fashion. “Policymakers, wake up and smell the coffee!”, the report says, in the hope that the Indian government will get its act together and miraculously transform the country. There is an urgency to SBI’s assessment. It says that India has only 10 years to graduate to a “developed nation”. If it fails to do so, it will, in a likelihood, always be classified as a <keyword id="2343673" type="PERSON" weightage="20" keywordseo="developing-country">developing country</keyword>. The reason? If India’s youth isn’t given adequate skills and opportunities, then the country’s so-called “demographic dividend” - its large and young <keyword id="6356897" type="ORGANIZATION" weightage="20" keywordseo="labour">labour</keyword> force - will become a huge disadvantage by 2030. They won’t be able to contribute productively to the economy, and will hence, be a drag on resources and social programmes. Developed vs developing According to a number of multilateral organisations, such as the United Nations (UN) and the <keyword id="6366068" type="COMPANY" weightage="20" keywordseo="international-monetary-fund">International Monetary Fund</keyword> (IMF), developed countries are categorised as such because they’ve achieved a certain level of infrastructure or the general standard of living and are above a certain bracket with respect to <keyword id="6354971" type="DEFINITION" weightage="20" keywordseo="gross-domestic-product">gross domestic product</keyword> (GDP) per capita. The IMF categorises economies as developed or “high income” if their <keyword id="311782" type="ORGANIZATION" weightage="20" keywordseo="Gross-National-Income">gross national income</keyword> (GNI) per person <a href="https://datahelpdesk.worldbank.org/knowledgebase/articles/906519-world-bank-country-and-lending-groups">is above $12,236</a>. India currently languishes in the “lower middle income” bracket since its GNI per capita is between $1,006 and $3,955. Despite a slightly larger population, China is in the “upper-middle income” category. A focus on <keyword id="6355445" type="UNKNOWN" weightage="20" keywordseo="education">education</keyword> reform The right to education does not translate into a right to quality education. In order to prevent its demographic dividend from turning into a disadvantage, SBI says that India will need to dramatically improved education and skill development outcomes in the next decade. This entails the reform and increased investment in government schools, which education a large portion of the country’s children. A few measures include the diversion of funds earmarked for private schools to government schools, for the purpose of upgrading facilities and infrastructure. In addition, teachers need to be better compensated. A new education policy has been stuck in the drafting stage ever since the Modi administration came to power in 2014. Prakash Javadekar, India’s minister for human resource development, told the Hindu yesterday that he will be presented with <a href="http://www.thehindu.com/opinion/interview/the-government-is-spending-nearly-4-of-gdp-on-education/article24146265.ece">a draft of the policy</a> next week. Higher education could also do with a revamp. The University Grants Commission, India’s higher education regulator, is currently <a href="https://www.business-standard.com/article/education/want-radical-reforms-in-higher-education-exams-ugc-invites-suggestions-118061300762_1.html">in the process of taking suggestions</a> from academics, students and university administrators on how to improve the higher education landscape in the country. The revamp is expected to cover entrance exams, the enhancement of technology and infrastructure and structural changes. However, based on how these things usually go, the report by the SBI is unlikely to spur the government into immediate action. India’s education system has been in need of an overhaul for decades now. It’s a extremely large problem to deal with, and ten years is a short amount of time. It seems that India will be stuck “developing” for the foreseeable future.

India’s large and young labour force could become a huge disadvantage by 2030

<ul><li>The <keyword id="156153" type="General" weightage="100" keywordseo="ministry-of-finance" source="Orion">Ministry of Finance</keyword> is recruiting 15 paid and 10 unpaid interns for a duration of 3-6 months.</li><li>The online application window will close on June 16, 2022.</li><li>Candidates can expect a stipend ranging between ₹10,000-20,000 depending upon their qualifications.</li></ul>The Ministry of Finance is inviting applications to fill 15 internship posts at the Department of Economic Affairs for a period of three to six months. The role is open for PhD and postgraduate students working on specific issues such as microeconomic management, economic reforms, capital markets, exchange management, foreign investment in India and Indian investment abroad, monetary policy and others. The online application window is open and the last day to apply for the opportunity is June 16. <cmsannotation type="cmsannotation" annotationid="Stipend" comment="subhead" text="Stipend">Stipend</cmsannotation> Post-graduate students will get a token remuneration of ₹10,000 per month, while PhD students will receive ₹20,000 per month on completion of their internship after submitting a report, a paper or feedback. The ministry will also be hiring ten additional unpaid interns out of those who are not selected for the paid internship. <cmsannotation type="cmsannotation" annotationid="Eligibility criteria for the internship" comment="subhead" text="Eligibility criteria for the internship">Eligibility criteria for the internship</cmsannotation> Candidates pursuing post-graduation (session 2021-23) or Ph.D. in economics/law/ finance/ or management from universities/ institutions ranked among the top 25 as per the National Institutional Ranking Framework. <cmsannotation type="cmsannotation" annotationid="Certificate of Internship" comment="subhead" text="Certificate of Internship">Certificate of Internship</cmsannotation> The certificate will be issued to the Interns on satisfactory completion of their internship of not less than three months and submission of their report/ paper/ feedback/ attendance certificate duly certified by the divisional head. <cmsannotation type="cmsannotation" annotationid="How to apply" comment="subhead" text="How to apply">How to apply</cmsannotation> Interested and eligible candidates can apply for the opportunity before June 16, 2022, on the official website of<a href="https://dea.gov.in/"> the Ministry of Finance</a>. <ol><li>Open the official website on any smart device. </li><li>Click on the link ‘Internship Scheme of the Department of Economic Affairs for the year 2022-23’. </li><li>Fill up your details and register yourself. </li><li>Add three divisions of interest in order of preference, duration of availability and complete the application form. </li><li>Submit the application form by clicking on ‘Submit’.</li></ol> Candidates will be shortlisted by a committee of senior DEA officers on the basis of the application form. Interested candidates may seek more information <a href="https://dea.gov.in/sites/default/files/internship%20ad%202022-23.pdf">here</a> and apply <a href="https://dea.gov.in/">here</a>. SEE ALSO: <a target="_blank" class="c-link c-message_attachment__title_link" href="http://www.businessinsider.in/business/auto/news/maruti-suzuki-will-gain-the-most-from-economic-recovery-and-also-regain-lost-market-share-say-brokerages/articleshow/92171487.cms">Maruti Suzuki will gain the most from economic recovery and also regain lost market share, say brokerages</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="http://www.businessinsider.in/business/news/indias-indigenous-drones-set-to-take-flight-but-concerns-remain-say-experts/articleshow/92171103.cms">India's indigenous drones set to take flight but concerns remain, say experts</a>

Ministry of Finance is hiring interns with a maximum stipend of ₹20,000 per month

<ul class="summary-list"><li><keyword id="11894337" type="UNKNOWN" weightage="60" keywordseo="russia" source="Orion">Russia</keyword> once had ambitions for Moscow to be an international financial center.</li><li>But its annexation of Crimea in 2014 unleashed a rash of <keyword id="12754126" type="UNKNOWN" weightage="60" keywordseo="sanctions" source="Orion">sanctions</keyword> and curbed foreign investments.</li></ul>It was only a decade or so ago that Russia was working towards its grand ambition of making Moscow a global financial hub.At a 2010 conference in St. Petersburg, then-President Dmitry Medvedev said the country's interest in becoming a global financial center was "obvious," the <a href="https://www.bbc.com/news/10391949">BBC</a> reported at the time. Russia needs "a developed and globally competitive national financial system" to modernize the <keyword id="11893570" type="UNKNOWN" weightage="60" keywordseo="economy" source="Orion">economy</keyword>, Medvedev said."The Kremlin was advancing a lot of efforts to make Moscow an international financial center," said Hassan Malik, a senior sovereign analyst at Loomis Sayles, a Boston-based investment management consultancy."Various Russian politicians, including Putin, talked about making Russia an international financial center for years," Malik, who lived in Russia from 2005 to 2008, added to Insider.Over the next 10 years, Russia started to lay the groundwork for its vision. There were official efforts to elevate the profiles of Moscow and St. Petersburg, and the Kremlin pushed to make the ruble a global reserve currency, Malik said.As a large and resource-rich economy, Russia — despite its risks — was an attractive investment destination. Global financial powerhouses such <a href="https://markets.businessinsider.com/news/stocks/goldman-sachs-shutters-russia-business--first-major-wall-street-bank-to-leave-after-ukraine-war-11128807">Goldman Sachs</a> and <a href="https://www.reuters.com/business/finance/citi-talks-with-russian-buyers-over-sale-local-operations-ft-2022-07-01/">Citibank</a> set up shop in Moscow. The <a href="https://www.businessinsider.com/pwc-kmpg-russia-belarus-ukraine-invasion-accounting-big-four-mckinsey-2022-3">Big 4 accounting firms</a> — PwC, KPMG, EY, and Deloitte — were also in the country.But Russia's <a href="https://www.businessinsider.com/how-russia-took-crimea-2015-3">illegal annexation of Crimea in 2014</a> and its invasion of <keyword id="11985141" type="UNKNOWN" weightage="60" keywordseo="ukraine" source="Orion">Ukraine</keyword> in 2022 have thrown its financial hub ambitions into peril.In the months since the invasion, countries have slapped Russia with sweeping sanctions. <a href="https://www.businessinsider.com/goldman-sachs-pulls-out-of-russia-ukraine-invasion-2022-3https://www.businessinsider.com/goldman-sachs-pulls-out-of-russia-ukraine-invasion-2022-3https://www.businessinsider.com/goldman-sachs-pulls-out-of-russia-ukraine-invasion-2022-3">Major banks</a> and international financial institutions have <a href="https://www.businessinsider.com/list-all-the-companies-pulling-out-of-russia-ukraine-war-2022-3">pulled out of the country</a> en masse. The big 4 accounting firms have all pulled out of Russia or begun the steps to do so, as have Goldman and Citibank. What's more, the war has not only jeopardized Moscow's standing as a <keyword id="11895316" type="UNKNOWN" weightage="100" keywordseo="finance" source="Orion">finance</keyword> hub: It also marks a reversal from Russian President <keyword id="11899444" type="UNKNOWN" weightage="60" keywordseo="vladimir-putin" source="Orion">Vladimir Putin</keyword>'s efforts early in his reign to modernize the economy.<h2>Economic expansion and reform in Putin's early years</h2> Russia's economy wasn't always moving backward.When Putin first came to power as Russia's president from 2000 to 2008, he advocated for reforms and modernization, wrote <a href="https://www.atlanticcouncil.org/blogs/ukrainealert/vladimir-putins-dark-journey-from-economic-reformer-to-war-criminal/">Anders Åslund,</a> an economist and a senior fellow at the Stockholm Free World Forum, a think tank. At the time, Putin "often championed sensible reforms while promoting initiatives to modernize and diversify the Russian economy," Åslund wrote on the <a href="https://www.atlanticcouncil.org/blogs/ukrainealert/vladimir-putins-dark-journey-from-economic-reformer-to-war-criminal/">Atlantic Council's</a> blog on June 13. Among his <a href="https://www.piie.com/commentary/speeches-papers/assessment-putins-economic-policy">major reforms</a> were tax reform and cutting red tape for the setup of small and medium enterprises.Putin managed to complete all the progressive economic reforms started in the 1990s by the administration of Boris Yeltsin, who served as Russia's first president after the Soviet Union collapsed in 1991, Åslund added. Putin also championed far-reaching international integration of Russia, pushing for the country's membership into the World Trade Organization, Åslund noted."These policies paid dividends. Russia enjoyed a period of uniquely strong economic expansion during the early years of the Putin era, with annual growth rates of around seven percent from 1999 to 2008," wrote Åslund. Foreign direct investments, or FDI, into Russia rose steadily in the 2000s up until the Global Financial Crisis, when they slumped, according to <a href="https://data.worldbank.org/indicator/BX.KLT.DINV.CD.WD?locations=RU">World Bank</a> data. After the recession, FDI into the country resumed a general trend upwards from 2009 until <a href="https://www.businessinsider.com/how-russia-took-crimea-2015-3">Russia illegally annexed Crimea</a> from Ukraine in 2014, prompting a raft of US and EU sanctions.Even after the annexation of Crimea, Russia continued to push ahead with its financial ambitions: The Moscow Exchange that was set up in 2011 continues trading today. The country's top central banker, Elvira Nabiullina — who has been helming the institution since 2013 — was well-respected by her peers and named by several trade publications, including <a href="https://www.euromoney.com/article/b12klw38gh82lt/central-bank-governor-of-the-year-2015-nabiullina-displays-crisis-fighting-skills">Euromoney in 2015,</a> as the world's best monetary policymaker.<h2>Turning to isolationist policies</h2>By the time Putin began his second presidency in 2012, he had "already begun embracing isolationist policies, protectionism, and import substitution," Åslund said.Today, Russia is all but an international pariah, with global financial institutions withdrawing from the market left, right, and center due to sanctions.In March, just days after the invasion, <a href="https://www.thecityuk.com/news/thecityuk-terminates-links-with-moscow/">TheCityUK</a> — a prominent industry group — tore up a memorandum of understanding with Russia that supported Moscow's path to becoming an international financial center.In the 100 days since it was founded, a <a href="https://www.businessinsider.com/repo-global-task-force-freeze-330-billion-russia-oligarch-assets-2022-6">US-backed global task force</a> has blocked and frozen more than $330 billion in assets belonging to sanctioned Russians and the country's central banks.At least tens of thousands of jobs have been impacted — the Big Four accounting firms employ about <a href="https://www.ft.com/content/e81be5c6-8c6f-42fe-9bed-92099882aaaa">15,000 staff</a> collectively, while Western banks employ about <a href="https://www.ft.com/content/0b500683-5dd9-4c4b-897a-9231181c808e">40,000 staff,</a> according to the Financial Times.<h2>Russia is turning inward to weather sanctions, but hitting the big league of knowledge economies will be hard</h2>Despite the exits, unemployment in Russia has been steady as foreign companies are leaving in an orderly fashion, and as the <a href="https://www.businessinsider.com/explainer-russia-economy-inflation-slowed-unemployment-steady-sanctions-ukraine-war-2022-6">Kremlin has been trying to preserve employment</a> through implicit pressure on employers — a tactic Putin's regime has been using throughout the years, said Malik. This has contributed to a flurry of deals involving foreign companies selling their businesses and stakes in their Russian operations to local buyers who would continue running them under a different brand.<a href="https://www.businessinsider.com/russia-putin-preparing-west-sanctions-decade-since-ukraine-crimea-annexation-2022-6">Russia</a> is seeking to turn inward to weather current sanctions, but it'll be challenging for the country to make inroads into the big league of knowledge economies, experts say."A knowledge economy depends on interacting with the cutting edge of whatever field you're in — which means international interactions," Malik said.<a href="https://markets.businessinsider.com/news/stocks/imf-economy-outlook-forecast-global-russia-ukraine-war-projection-commodities-2022-4">Russia's economy</a> is expected to shrink 8.5% in 2022, with a further decline of 2.3% in 2023, the <a href="https://www.imf.org/en/Publications/WEO/Issues/2022/04/19/world-economic-outlook-april-2022">International Monetary Fund</a> projected in an April report. That would be the economy's largest decline since the years following the fall of the Soviet Union in 1991."The 2014 invasion of Ukraine dealt a serious blow to even what equivocal progress there had been until then, and after the events of recent months, it is difficult for me to see how Russia will emerge as a global financial center in the foreseeable future," said Malik.

You Searched For "international monetary reforms" and got 11 results

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India’s large and young labour force could become a huge disadvantage by 2030

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