NEW DELHI: Chief Economic Adviser V Anantha Nageswaran on Thursday said the global uncertainty had been rising after the recent developments in the United States, and governments, businesses and individuals should keep “margins of safety” in fiscal, corporate and savings account planning.
He said the global growth estimates of the International Monetary Fund (IMF) given in January looked outdated and countries would have to watch what the developments in the US over the last week would do to confidence, bank lending growth and the subsequent chain effects.
Two banks in America have gone belly-up over the last week. Signature Bank, New York, which lent mostly to crypto industry, was shut down by the regulators on Sunday after there was a run on their deposits.
Besides, the failure of Silicon Valley Bank (SVB) last week left many start-ups, tech companies, entrepreneurs and VC funds nervous and jittery. SVB, the 16th largest bank in the United States, was closed on Friday last by the California Department of Financial Protection and Innovation, which later appointed the Federal Deposit Insurance Corporation (FDIC) as its receiver.
Speaking at a seminar, Nageswaran said uncertainty had been on the rising trend and had gone up a few notches in the last week and “this is something which countries need to live with, not only this year but for the next year and beyond”.