The IMF upgraded its forecast for the global economic growth by 0.1 percentage points on Tuesday to 3.5%.
"We are now forecast by the International Monetary Fund to be the second fastest growing major advanced economy this year".
Advanced Asia (Japan, Korea, Australia, Taiwan, Singapore, Hong Kong, New Zealand) will likely grow by 1.9 percent this year and 1.6 percent in 2018, while emerging and developing Asian countries which includes ASEAN-5, China and India, are seen to grow by 6.4 percent for the two years, same growth it recorded in 2016. "So, the world economy may be gaining momentum, but we can not be sure that we are out of the woods".
Analysts say cheap credit has bolstered the construction sector since previous year, attracting savers and speculators who have pushed up housing prices in big cities and accelerated manufacturing activity.
Maurice Obstfeld, IMF chief economist, who unveiled the fund's World Economic Outlook in Washington on Wednesday, said global growth will continue with the help of advanced economies and emerging, low income countries.
Obstfeld expressed concern over a possible sharp United States dollar appreciation resulting from U.S. fiscal and monetary policies and the subsequent difficulties for emerging and some developing economies.
Galaxy S8 may ship with Google's AI program
You can enable the facial recognition feature that gives you the option of unlocking your device just by looking at it. This is the reason why the batteries of the Galaxy S8 and Galaxy S8 Plus have been reduced.
However, IMF has now retained its earlier India growth forecasts for 2017-18 and the next fiscal at 7.2 per cent and 7.7 per cent, respectively, its latest annual World Economic Outlook (WEO). Banks were weak and reluctant to lend, and deeply indebted governments made growth-killing budget cuts.
The IMF does warn of downside risks to its optimistic forecast, including "the threat of deepening geopolitical tensions", the possibility rising USA interest rates will squeeze economic growth and rattle financial markets and the threat that protectionist measures will damage global trade. Plummeting oil prices forced energy companies to slash production.
The warning came a day after China announced its economy grew an annualised 6.9 percent in the first quarter of 2017, beating expectations.
Financial markets have marched upward. It did not specifically mention the Trump administration's "America First" trade agenda aimed at reducing USA trade deficits and turning away more imports. Russia's growth forecast for this year and next was raised to 1.4%. The country is set to remain the fastest growing economy this year and next.
Christine Lagarde, managing director of the International Monetary Fund (IMF), at the Institute of International Finance G-20 Conference in Frankfurt, Germany, last month.
He cited the subdued trend productivity growth across the world economy, and also raised the uncertainties from macroeconomic policies in the United States and China, the world's two largest economies.
Comments