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Consider the following statements with reference to the Macroeconomic Vulnerability index. 1. Macroeconomic Vulnerability Index is released by IMF yearly. 2. This Index adds together the rate of inflation, current account deficit, and fiscal deficit of a country. Which of the statements given above is/are correct?

Consider the following statements with reference to the Macroeconomic Vulnerability index. 1. Macroeconomic Vulnerability Index is released by IMF yearly. 2. This Index adds together the rate of inflation, current account deficit, and fiscal deficit of a country. Which of the statements given above is/are correct? Correct Answer 2 only

The correct answer is 2 only. 

Key Points

  • The Macro-Economic Vulnerability index was introduced in Economic Survey 2014-15. It is not released by the IMF. Hence statement 1 is NOT Correct.
  • It was released by the Ministry of Finance recently, adds together the rate of inflation, current account deficit, and fiscal deficit of a country.
  • It adds a country’s fiscal deficit, current account deficit, and inflation. Hence statement 2 is Correct.
  • This index showed that in 2012 India was the most vulnerable of the major emerging market countries.
  • Since 2013, India’s index has improved by 5.3% points compared with 0.7 percentage points for China, 0.4% points for all countries in India’s investment grade.

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