The Fund said China’s reliance on stimulus, rapid expansion of debt and slow progress in dealing with corporate debt “raises the risk of a sharper slowdown or disruptive adjustment.” India, which has recorded some of the world’s strongest recent growth, is experiencing a shock to consumption from the government’s decision to withdraw larger currency notes from circulation, chopping a full percentage point off the IMF’s fiscal 2016-2017 growth outlook to 6.6 percent.
The Fund trimmed its fiscal 2017-2018 forecast for India to 7.6 percent from 7.2 percent.
These countries will not have data up to 2021 because of this.
IMF Managing Director Christine Lagarde warned that global financial leaders need to beware of a number of threats from growing political tensions to increased skepticism about the benefits of globalization and rising levels of income inequality.
Lagarde said it will be important for finance ministers from the IMF's 189-member countries to focus on addressing these threats at a time when the global economy appears to finally be in a sustained recovery following the deep recession caused by the 2008 financial crisis.
The IMF noted, however, that Trump’s plans for expansionary fiscal measures including tax cuts and infrastructure spending also could stoke inflation in an economy already nearing full employment.
“If a fiscally-driven demand increase collides with more rigid capacity constraints, a steeper path for interest rates will be necessary to contain inflation, the dollar will appreciate sharply, real growth will be lower, budget pressure will increase, and the U. current account deficit will widen,” IMF chief economist Maurice Obstfeld said in a statement.
WASHINGTON (Reuters) - The International Monetary Fund on Monday said the U. economy would grow faster than previously expected in 20 based on the incoming Trump administration’s tax and spending plans, but it kept its global growth forecasts unchanged due to weakness in some emerging markets.
Updating its World Economic Outlook, the IMF forecast overall global growth at 3.4 percent for 2017 and 3.6 percent for 2018, unchanged from October.
The IMF cut Mexico’s growth forecasts by 0.6 percentage point in both 20, citing a consumer spending pullback amid worries about Trump’s trade policies.
The IMF revised its 2017 growth forecast for China to 6.5 percent, up 0.3 percentage point from October, based on expectations for continued stimulative government policies, but left unchanged its 2018 forecast for a slowdown to 6.0 percent growth.
It said it expects more certainty over the direction of U. policy by the time of the next full World Economic Outlook in April.