Turkey Current Affairs - 2019
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Reports suggest that the US could terminate the sanctions waivers it granted to some importers of Iranian oil after it re-imposed sanctions on Iran last year.
Ending of Sanction Waiver
- Reports indicate that the US has already communicated to seven countries viz. Japan, South Korea, Turkey, Italy, Greece, China and India- that they will no longer be exempt from US sanctions if they continue to import oil from Iran after their waivers end on May 2.
- The ending of sanction waiver is part of the US strategy to exert maximum pressure and isolate Iran.
- The US has stated it wants to deprive the outlaw regime of the funds that it has used to destabilise the Middle East for decades and incentivise Iran to behave like a normal country.
The news of the ending of sanctions waiver exerted upward pressure on global prices of crude. Further. US has stated that the US along with Saudi Arabia and UAE have agreed to take timely action to assure that global demand is met as all Iranian oil is removed from the market.
The International Monetary Fund (IMF) in the World Economic Outlook 2019 April report has made the following forecasts:
- The global growth will be 3.3% in 2019, down from 3.6% in 2018 and 4% in 2017.
- The reduced growth rates are attributed to lower global expansion in the second half of 2018 caused by U.S.-China trade tensions, macroeconomic stress in Turkey and Argentina, tighter credit policies in China and financial tightening plus normalisation of monetary policy in advanced economies.
- Global growth is expected to level out at 3.6% over the medium term beyond 2020. The growth would be driven by a moderation in expansion in advanced countries (caused by weak productivity growth and slow labour force growth) and the stabilisation of emerging market expansion at 2020 levels.
- Advanced economies are expected to slow down to 1.6% growth by 2022 and remain at that rate thereafter.
- Growth is expected to steady at 4.8% over the medium term For emerging markets and developing countries.
- The emerging markets and developing countries are growing faster than advanced economies. Their contribution to global growth is expected to increase from 76% to 85% over the next five years.
- China is expected to slow down to 5.5% by 2024 as it moves towards increasing private consumption and services and regulatory tightening.
Estimates for India
- India’s economy will grow 7.1% in 2019-20 and is expected to accelerate to 7.3% growth this fiscal and to 7.5% in 2021-22. All the estimates are 0.2 percentage points less than its previous assessment in January.
- IMF estimates are higher than those of the Reserve Bank of India. RBI had last week cut its growth forecast to 7.2% for this fiscal and 7.4% for FY21.
- The reduction in India’s estimate is on account of the “the recent revision to the national account statistics that indicated somewhat softer underlying momentum”.
- IMF suggests reforms to hiring and dismissal regulations to help incentivise job creation and absorb the country’s large demographic dividend.
- India’s growth is expected to stabilise at 7.75% over the medium term, driven by structural reforms and the easing of infrastructure bottlenecks.
IMF calls for continued implementation of structural and financial sector reforms in order to lower public debt and aid growth.