News Mania Desk / Piyal Chatterjee / 26th October 2024
Nirmala Sitharaman attends During her speech at the International Monetary Fund’s (IMF) 2024 Annual Meeting, Union Finance Minister Nirmala Sitharaman spoke up the need for fairness and truth in sovereign ratings for emerging markets and developing economies (EMDEs).
At the IMFC Plenary session on “Managing Director’s Global Policy Agenda,” held in Washington, DC, on Friday, Sitharaman emphasized that sovereign ratings ought to better represent the economic foundations of EMDEs in order to guarantee equitable access to capital and enhanced capacity to draw in private investment. “There is need for sovereign ratings to adequately account for EMDEs economic fundamentals to ensure the cost of capital for them and their ability to attract private capital is factored in,” Sitharaman said.
In order to enhance rating methodologies and better reflect a nation’s capacity for repayment and economic resilience, she also called for increased cooperation with credit rating organizations.
“FM also underlined engagement with credit rating agencies and calling for improvements in methodology to ensure that they capture the fundamentals reflecting the ability and willingness to repay,” the Ministry of Finance noted in a social media post. Additionally, Sitharaman called for governance reforms within the IMF and other global institutions to better align with the evolving global economic landscape.
“Recognising the evolution of the IMF as a multilateral institution over the last 80 years, the Union Finance Minister said that the current global order warrants governance reforms in major global institutions, including the IMF @IMFNews,” the Ministry of Finance added in another post.
In order to enhance rating methodologies and better reflect a nation’s capacity for repayment and economic resilience, she also called for increased cooperation with credit rating organizations. “Recognising the evolution of the IMF as a multilateral institution over the last 80 years, the Union Finance Minister said that the current global order warrants governance reforms in major global institutions, including the IMF @IMFNews,” the Ministry of Finance added in another post.
Sitharaman discussed the global economy in 2024 and commended its resiliency while pointing up a number of enduring risks. She warned that downside risks, such geopolitical tensions and poor medium-term global growth prospects, are still a concern even as inflation is getting closer to central bank targets and economic output in several big nations is approaching its potential.
“There are several downside risks, including growing geo-political tensions and medium-term global growth prospects, are a concern due to their continued weakness,” Sitharaman stated. Sitharaman endorsed the IMF’s current Global Policy Agenda, which emphasizes securing a “soft landing” for the global economy and breaking free from a cycle of low growth and high debt.
She emphasized the importance of the IMF in offering policy recommendations, particularly for nations that are vulnerable to debt, and she called for the fair application of the IMF’s recommendations among its member countries in order to maintain equity. In order to better serve its members, Sitharaman also praised the IMF’s attempts to foster unity in a divided globe and urged it to continue being flexible in areas like lending, capacity building, and surveillance.
