Finance Minister Arun Jaitley issued a statement on Friday seeking to bolster investor confidence in India following the aftermath of the E.U. referendum in which the U.K. voted to leave the European Union. The Sensex was down nearly 1,000 points following the results of the poll.
“We are well prepared to deal with the short and medium term consequences of Brexit,” Mr Jaitley said. “Our macro-economic fundamentals are sound with a very comfortable external position, a rock-solid commitment to fiscal discipline, and declining inflation. Our immediate and medium-term firewalls are solid too in the form of a healthy reserve position.”
The final Brexit vote stood at 52 per cent voting to exit the EU, and 48 per cent voting to remain. The Finance Minister did acknowledge that the Brexit result would affect economies around the world.
“This verdict will, obviously, further contribute to such volatility not least because its full implications for the UK, Europe and the rest of the world are still uncertain,” Mr. Jaitley said. “All countries around the world will have to brace themselves for a period of possible turbulence while being watchful about, and alert to, the referendum’s medium term impacts,” he added.
Mr. Jaitley also reiterated the government’s growth forecast for the economy, and said it would push for the passage of the GST Bill, adding that the government and the Reserve Bank of India were working together to mitigate any short term shocks due to the U.K. poll results.
“The government and the Reserve Bank of India as well as other regulators are well prepared, and working closely together, to deal with any short term volatility,” he said. “Our aim will be to smooth this volatility and minimize its impact on the economy in the short term.”
“At the same time, for the medium term, we will steadfastly pursue our ambitious reform agenda—including early passage of the GST — that will help us realise our medium term growth potential of 8-9 per cent and help achieve our objective of development for all,” Mr Jaitley added.
The Sensex was trading 987 points down as of 11.40 am on Friday.