to grow at over 7 pc in 2017 & 2018
currently gaining momentum, says IMF
Monetary Fund (IMF) has projected India to grow at 7.2 per cent and 7.7 per cent
in 2017 and 2018, respectively, up from 6.8 per cent in 2016.
Overall, as per an
analysis by Mr Maurice Obstfeld, Economic Counsellor and Director of Research at
IMF, "momentum in the global economy has been building since the middle of
last year, allowing us to reaffirm our earlier forecasts of higher global growth
this year and next. We project the world economy to grow at a pace of 3.5 per
cent in 2017, up from 3.1 per cent last year, and 3.6 per cent in 2018.
Acceleration will be broad- based across advanced, emerging and low-income
economies, building on gains we have seen in both manufacturing and trade.
projection for 2017 in the April World Economic Outlook is marginally higher
than what we expected in our last update. This improvement comes primarily from
good economic news for Europe and Asia, as well as our continuing expectation
for higher growth this year in the United States.
signs of strength, many other countries will continue to struggle this year with
growth rates significantly below past readings. Commodity prices have firmed
since early 2016, but at low levels, and many commodity exporters remain
challenged—notably in the Middle East, Africa and Latin America. At the same
time, a combination of adverse weather conditions and civil unrest threaten
several low-income countries with mass starvation. In Sub-Saharan Africa, income
growth could fall slightly short of population growth, but not by nearly as much
as last year.
uncertainties & politics
current momentum will be sustained remains a question mark. There are clearly
upside possibilities. Consumer and business confidence in advanced economies
could rise further—though confidence indicators are already at relatively
elevated levels. On the other hand, the world economy still faces headwinds. For
one thing, trend productivity growth remains subdued across the world economy,
for complex reasons… that seem likely to persist for some time.
"Aside from the
conjunctural policy uncertainties, a distinct set of threats comes from the
growth in advanced economies of domestic political movements sceptical of
international economic integration—no matter if integration is promoted
through multilateral rules-based systems for the governance of trade, more
ambitious regional arrangements such as the Euro area and European Union, or
globally agreed standards for financial regulation. A broad withdrawal from
multilateralism could lead to such self-inflicted wounds as widespread
protectionism or a competitive race to the bottom in financial oversight—a
struggle of each against all that would leave all countries worse off.
Out of the woods?
"So, the world
economy may be gaining momentum, but we cannot be sure that we are out of the
woods. How can countries safeguard and nurture the global recovery?
"There is no
universal policy prescription for diverse economies at different conjunctural
stages. Deflationary pressures have generally receded, but monetary
accommodation should continue where inflation remains stubbornly below target
levels. Growth-friendly fiscal measures, especially where there is fiscal space,
can support demand where that is still needed and contribute to expanding supply
and reducing external imbalances. All countries have opportunities for
structural reforms that can raise potential output as well as resilience to
shocks, although specific reform priorities differ across economies.
damage from protectionist measures will require a renewed multilateral
commitment to support trade, paired with national initiatives that can help
workers adversely affected by a range of structural economic transformations,
including those due to trade. Trade has been an engine of growth, promoting
impressive per capita income gains and declines in poverty throughout the world,
especially in poorer countries. But its benefits have not always been equally
shared within countries, and political support for trade will continue to erode
unless governments step up to invest in their workforces and aid the adjustment
growth and stability rely on multilateral collaboration across a range of
problems that spill over national borders—not just trade. The challenges
include financial oversight, tax avoidance, climate, disease, refugee policy and
famine relief. Historically, inclusive cooperative approaches to interdependence
have worked best. National policymakers, however, must do the hard work to
ensure that the gains from harnessing interdependence, which are substantial,
are broadly shared."
Exim News Service - Washington,