India’s growth remains quite robust into future

  • India’s growth remains quite robust into future

India’s growth remains quite robust into future

Warning that the broad expansion for the world economy that began about two years ago has plateaued, Maurice Obstfeld, the IMF's chief economist, said: "Countries must resist inward-looking thinking and remember that on a range of problems of common interest, multilateral cooperation is vital". "Amid rising tensions over worldwide trade, the broad global expansion that began roughly two years ago has plateaued and become less balanced", the IMF noted. "India's growth rate is expected to rise from 6.7 percent in 2017 to 7.3 percent in 2018 and 7.5 percent in 2019, as drags from the currency exchange initiative and the introduction of the goods and services tax fade".

"India's growth remains quite robust into the future". In its April World Economic Outlook (WEO), the International Monetary Fund had predicted that it will accelerate to 3.9 per cent in the current year and next, the fastest since 2011.

The IMF also noted that China continued to grow in line with its earlier projections.

Amid rising oil prices and a worsening export outlook, the estimates for Germany, France and Italy were cut by 0.3 points each, with Germany seen expanding by 2.2 percent this year and 2.1 percent in 2019.

International Monetary Fund has said escalating trade tensions pose an "important downside risk" to the global economy.

The IMF has scaled down economic growth in Argentina and Brazil, besides India, among emerging market economies.

On Saturday, Economic Affairs Secretary Subhash Chandra Garg had said, "Eight per cent growth is very much achievable".

The Japanese economy is forecast to cool to 1 per cent, marking the slowest growth rate among advanced nations - a downgrade of 0.2 per cent - following weak private consumption and investment in the first quarter of the year.

Despite highlighting greater risks for the world economy, the fund left its global growth forecast of 3.9 per cent for both this year and next unchanged.

The dollar has already appreciated broadly since April, and financial conditions facing emerging and frontier economies had become somewhat more restrictive. Both factors highlighted in the report apply to Pakistan.

Global current account imbalances would widen owing to a relatively high demand growth in the USA, the report added.

Citing the tariff increases by the USA and retaliation by other countries, it said they "could derail the recovery and depress medium-term growth prospects".

"Our modeling suggests that if current trade policy threats are realized and business confidence falls as a result, global output could be about 0.5 percent below current projections by 2020", added Obstfeld.

It added the U.S. could be the "focus of global retaliation" and would be especially vulnerable if President Trump slapped China with $200 billion in fresh tariffs.

The report noted that worldwide migration pressures were "politically destabilising" and could not be dealt with without cooperative action to "improve global security, support the Sustainable Development Goals, and resist climate change and its effects".