Global growth estimates trimmed

EASING US-China trade tensions have lessened uncertainty and the world economy may have hit bottom but a sharp slowdown in India is creating a drag worldwide, the International Monetary Fund said Monday.

However, while the risks to the global economy have grown smaller, the Washington-based global lending institution cautioned that outcomes “depend to an important extent on avoiding further escalaMANILA

tion” between Washington and Beijing.

In the latest update to its World Economic Outlook, the IMF cut the global growth estimate for 2020 to 3.3 percent, 0.1 percentage point lower than in the prior report released in October.

It lowered the 2021 forecast by 0.2 percentage points, to 3.4 percent.

The sharp drop for India “accounts for the lion’s share of the downward revisions,” the IMF said.

IMF chief Kristalina Georgieva pointed to India’s struggles with declining consumption and investments, budget deficits and delays in making structural reforms.

“After a synchronized slowdown in 2019, we expect a moderate pick-up in global growth this year and next,” Georgieva told a news conference on the eve of the 50th World Economic Forum in Davos, the annual gathering of business and political elites.

“We are already seeing some tentative signs of stabilization but we have not reached a turning point yet,” she cautioned.

The IMF said the relationship between China and the United States, the world’s dominant economic powers, is still troubled by “unresolved disputes”.

“The risk of protracted subpar global growth remains tangible despite tentative signs of stabilizing momentum,” the fund warned in its quarterly report.

“Policy missteps at this stage would further enfeeble an already weak global economy.”

The charity Oxfam, in an annual report released Monday, warned of growing social inequality and the pressures that is generating.

It said the world’s 2,153 billionaires now have more money than the planet’s 4.6 billion poorest people.

“The gap between rich and poor can’t be resolved without deliberate inequality-busting policies,” Oxfam’s India head Amitabh Behar said.

- US-China trade deal US President Donald Trump signed a deal with China last week that eases the escalating trade tensions but leaves in place tariffs on two-thirds of the goods imported from the Asian economic power.