India to retain fastest growing economy spot helped by reforms

Adjust Comment Print

Maurice Obstfeld, Economic Counsellor and Director of the Research Department, IMF said that the world economy continues to show broad-based momentum.

The International Monetary Fund is seeking a leading role in rallying the world's central banks to get ahead of digital money and cryptocurrencies in the global financial system, asking authorities to "distinguish between real threats and needless fears", according to a blog post by the fund's chief.

But trade tensions, such as the United States and China's recent dueling tariff announcements, could take a direct toll on trade and economic activity and also cause financial market turmoil that would tighten financial conditions and hurt confidence.

Debt levels - private and government - are very high.

It urges countries with excess current account surpluses and fiscal space - notably Germany - to increase public investment to boost potential growth and demand.

The recent intensification of trade tensions started in early March with the US' announcement of its intent to levy steel and aluminum tariffs for national security reasons, he said, adding that the announcement has fed into several bilateral negotiations aimed at reducing United States trade deficits with individual trading partners.

More news: Region told to brace for "potentially historic" ice storm
More news: Seven inmates killed as turf war turns into riot in US prison
More news: Marjory Stoneman Douglas teacher left loaded gun in public restroom

"Growth is projected at 4.4 percent in 2018 and 4 percent in 2019", it added.

"Global interdependence will only continue to grow and unless countries face it in a spirit of collaboration, not conflict, the world economy can not prosper", he said.

That represents a downgrade from January's outlook of 2.3 per cent growth forecast for this year, and it's less than the strong three per cent growth Canada experienced in 2017. But the forecast for 2019 was unchanged at 2.0%. One third of that uplift in U.S. growth is attributed to the Trump tax reform. And the large deficits Trump and the Republican majority in Congress made a decision to run to finance immediate fiscal stimulus will eventually force spending cuts and tax increases, the International Monetary Fund says.

In this respect the authors do add the caveat that the income from these smartphone sales "does not fully contribute to the Irish economy", as the acquisition of foreign owned IP assets, "leaves domestic employment mostly unchanged".

The unemployment rate was 5.6 per cent in February. The IMF says further cuts in interest rates are needed to bring price rises back towards that rate. That's better than the institution's forecasting department expected six months ago and an improvement on the 3.8-per-cent increase in 2017. Over the medium term, India's economic growth is "expected to gradually rise with continued implementation of structural reforms that raise productivity and incentivise private investment", it added.