Finance Minister Nirmala Sitharaman downplayed fears of global contagion from the Evergrande crisis in China and said the central bank and government were closely monitoring any risk of “tantrum typing” resulting from the likely shift in the policy of the US Federal Reserve.
Without naming China, she also pointed to a growing trend of small countries being drawn into a debt trap that threatened their sovereignty.
“I’m sure there will be, not country specific, but there will be this larger issue of debt sustainability, sovereignty and how small countries are facing a very difficult situation. and difficult when these two extremes are imposed on them, ”she said. at the opening session of the ICRIER G20 annual conference.
Emphasizing that India and the world had learned lessons from the 2008 global financial crisis, Ms. Sitharaman said she was not sure the Evergrande crisis would feature in the next G20 summit. “But without making specific reference to the G20 or to a particular country, we can see that globally, the feeling of concern can be there but the fear that it will certainly hit us, is not there,” he said. she said in response to a question from NITI Aayog Vice President Rajiv Kumar about challenges in China’s real estate sector spilling over to global markets.
“Specifically, not Evergrande, but debt sustainability is an issue. Which I am sure every world forum will have to deal with and talk about; in particular, the debts that are given, which also involve the sovereignty of a nation and threaten it; so it is a matter of serious concern and many countries are standing up to say: what is going on in the world? Ms. Sitharaman remarked.
Emphasizing that India had learned lessons from the way it handled the last taper tantrum which made it one of the “five fragile economies”, she said: “In collaboration with the Reserve Bank of India , we are definitely monitoring. “