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International Monetary Fund wants Indian government to be more credible, transparent on fiscal numbers

  
  Analysis
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New Delhi needs to become more “transparent” on the fiscal numbers as it is a “laggard” among the G20 peers on this front, a senior official from the International Monetary Fund said here on Wednesday.

The government has been missing its budgeted fiscal targets for the past few years and there is a need for a “credible fiscal consolidation” which is more ambitious as well, the official said, adding this is more so as government has not addressed how it will make up for the massive Rs 1.45 lakh crore tax giveaways in the form of corporate tax cuts.

The comments come amid allegations of the budget math not adding up with some pointing to a Rs 1.7 lakh crore hole in the estimates, and also over 100 economists questioning the official data computation.

“Fiscal transparency should be increased. It is fairly difficult for the private sector to get the full picture on fiscal standing,” the fund’s deputy director Anne-Mary Gulde said speaking at an NSE event here. 

“India is somewhat lacking in a programme on G20 data initiative on fiscal transparency where comparative countries have all made greater progress,” she added.

She said there is also a need for more credible fiscal consolidation as such a move will help reduce the relatively high level of debt and free up financial resources for the private sector. (more…)

G20 starts today, US – China meeting tomorrow. Deal seen as unlikely … but

  
Analysis, Economy
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Perhaps there is scope for some sort of US – China agreement stemming from the Trump – Xi meeting at the G20 summit.

‘Agree to keep talking’ seems the most likely outcome IMO, but we’ll soon find out. Any increase in hostility would be a negative but a dinner together is probably not going to lead to this, at least right away.
When do we get a deal? If we do.?
An interesting overnight note from ING says it’ll not be until towards the end of this year:
both sides want a deal
  • China can hurt the US economically but it knows that the US can hurt China even more. 
  • President Trump needs a deal to show the American people that he delivers on his promises to get better terms of trade for the US. He knows that this is best done without the US economy having to suffer from Chinese retaliation for an extended period of time.
We expect a deal to be struck in the last quarter of this year
  • it is likely that China as well as the US are prepared to make concessions in the end
  • After all, this is what’s happened in the renegotiation of Nafta
  • To strike a deal, Trump had to accept that Mexico and Canada would not agree to all of his original demands
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On that 
  • Trump had to accept that Mexico and Canada would not agree to all of his original demands
You’d say the same of China, but so far they’ve held firm. 
Added – G20 start 28th.
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