February 10, 2017

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International Monetary Fund trims global growth outlook this year and next

Oliver Blanchard gives opening remarks at World Economic Outlook press briefing at IMF HQ-2 in Washington, D.C. on Tuesday.  Photo:  Ye Myint
Oliver Blanchard gives opening remarks at World Economic Outlook press briefing at IMF HQ-2 in Washington, D.C. on Tuesday. Photo: Ye Myint

Washington D.C, 8 Oct —International Monetary Fund has revised its outlook of world growth that was said in April spring meeting to reach 3.6 per cent in 2014, up from 3.3 per cent in 2013, and 3.9 per cent in 2015 that world growth is forecast to be 3.3 percent this year and 3.8 percent next year.
The IMF’s latest World Economic Outlook trimmed its projection for global growth to 3.3 percent in 2014, unchanged from 2013, saying that growth is forecast to pick up to 3.8 percent in 2015.
“Recovery continues, but it is weak and uneven,” said Oliver Blanchard, IMF Economic Counsellor and Director of Research Department, at IMF’s World Economic Outlook press briefing on Tuesday.
The Fund economist pointed out that potential growth rates are being revised down, and these worse prospects are in turn affecting confidence, demand, and growth today.
In his short opening remarks before opening it up to questions, potential growth forecast for emerging market economies will be 1.5 percent lower than it was in 2011.
He continued that China is maintaining high growth despite the end of a housing boom and a credit boom and India has recovered from its slump with growth forecast to exceed 5 percent again.
Despite it is growing, high public debt inherited from the past together with very low potential growth are rising major macroeconomic and fiscal challenges  for Japan, he added.
The WEO predicts low income developing countries—not all of them, but most of them— continue to do well with high growth rate of reaching 6.1 percent this year and 6.5 percent next year.
According to the WEO, real GDP projection for Myanmar is to be 8.5 percent, up 0.2 percent from last year, and it is projected to see the same growth rate in 2015.
In his conclusion, he called on both advanced and emerging market countries to address the challenge by going beyond the general mantra of more structural reforms, identifying which reforms are mostly needed at the moment and which reforms are politically feasible.  He stressed the need of policymakers to re-establish confidence for a clear plan to deal both with the legacies of the crisis and the challenge of low potential growth.

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