IMF says global re­cov­ery on firmer foot­ing

Muscat Daily - - BUSINESS -

Washington, US – The global eco­nomic re­cov­ery is on firmer foot­ing as im­prov­ing growth in China, Europe and Ja­pan off­set down­ward re­vi­sions for the United States and Bri­tain, the International Mon­e­tary Fund (IMF) said on Sun­day.

How­ever, wage growth re­mains slug­gish which risks in­creas­ing ten­sions that have pushed some coun­tries to­ward more anti-global poli­cies, while ef­forts to erode fi­nan­cial reg­u­la­tions put in place since the 2008 cri­sis could erode sta­bil­ity, the IMF warned.

“The re­cov­ery in global growth that we pro­jected in April is on a firmer foot­ing; there is now no ques­tion mark over the world econ­omy's gain in mo­men­tum,” IMF chief econ­o­mist Mau­rice Ob­st­feld said.

Pre­sent­ing the lat­est up­date of the World Eco­nomic Out­look (WEO), he said “Re­cent data point to the broad­est syn­chro­nised up­swing the world econ­omy has ex­pe­ri­enced in the last decade.”

The fund still ex­pects the global econ­omy will grow by 3.5 per cent in 2017 and 3.6 per cent in 2018, the same as in the April WEO.

How­ever, the un­changed fore­cast masks some sig­nif­i­cant re­vi­sions, in­clud­ing in the United States where the IMF down­graded its growth es­ti­mate last month af­ter judg­ing that spend­ing plans promised by Pres­i­dent Don­ald Trump that had been ex­pected to pro­vide a boost to the econ­omy were stuck in limbo.

The US es­ti­mate was cut to 2.1 per cent for this year and next, down 0.2 points and 0.4 points, re­spec­tively, from the more op­ti­mistic fore­cast in the last re­port.

The out­look for the Bri­tish econ­omy also was re­vised down by 0.3 points to 1.7 per cent this year on weaker-than-ex­pected ac­tiv­ity in the first quar­ter, while the im­pact of Brexit ‘re­mains un­clear’.

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