Nirmala Sitharaman Calls For Fair Sovereign Ratings For Developing Economies At IMF Meeting

At the IMF’s 2024 Annual Meeting, Union Finance Minister Nirmala Sitharaman said that there was a need for fair and accurate sovereign ratings that accurately reflect the economic realities of emerging and developing economies (EMDEs).

During her address in Washington, DC, at the IMFC Plenary session on “Managing Director’s Global Policy Agenda", Sitharaman stressed that sovereign ratings should more accurately reflect the economic fundamentals of EMDEs, ensuring fair access to capital and improved ability to attract 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.

The Finance Minister also underlined engagement with credit rating agencies and called for improvements in methodology to ensure that they capture the fundamentals reflecting the country's ability and willingness to repay.

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 said in a post on X.

Discussing the global economy in 2024, Sitharaman praised its resilience but noted several persistent risks.

Noting that while the economic output in some major economies is approaching its potential and inflation is moving closer to central bank targets, she said that there are several downside risks, including growing geo-political tensions and medium-term global growth prospects, are a concern due to their continued weakness.

Also Read: Prime Minister Modi, Spanish PM Sanchez To Jointly Inaugurate Tata-Airbus C-295 Aircraft Manufacturing Facility In Gujarat On 28 October