International Monetary Fund bumps up global GDP forecasts for 2017 and 2018

Posted October 11, 2017

The IMF also said that it expects Cyprus's current account deficit to shrink to 3.8 percent this year, compared to 5.3 percent last year and to 2.7 percent in 2018 percent.

"In India, growth momentum slowed, reflecting the lingering impact of the authorities' currency exchange initiative as well as uncertainty related to the midyear introduction of the country-wide Goods and Services Tax", the International Monetary Fund said in its latest World Economic Outlook report.

The fund has also upgraded short-term growth in emerging countries and developing Europe to 4.5 percent from 3 percent in its April 2017 outlook. With growth outcomes in the first half of 2017 generally stronger than expected, upward revisions to growth are broad based, including for the eurozone, Japan, China, emerging Europe, and Russian Federation.

The IMF's previous projections for 2017 made in April and July had put India's economic growth rate at 7.2 percent.

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During its World Economic Outlook conference in Washington, the International Monetary Fund also forecast a growth of 3.5 percent in 2018 for Turkey, adding that the revised outlook also raised forecasts for emerging and developing economies in Europe.

The IMF said the squeeze on household finances in the United Kingdom had hit growth in the first two quarters of this year, and "the medium-term growth outlook is highly uncertain and will depend in part on the new economic relationship with the European Union and the extent of the increase in barriers to trade, migration and cross-border financial activity".

The growth would mark the fastest growth since 2011.

If Korea does reach an economic growth of 3 percent, it would be the first time since 2014.

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The OECD leading indicator, which is created to anticipate turning points in economic activity, projected an upbeat scenario of economic expansion in the countries that represent most of the world's economic output.

The IMF's forecasts are slightly more optimistic than the current consensus, but are unlikely to offer cheer to Philip Hammond, the chancellor, as he travels to Washington for the annual IMF meetings this week.

After years of sluggish global growth and less than rosey predictions about the future, the IMF's latest forecasts suggest calmer waters ahead. It expects growth to slow from 1.8% in 2016 to 1.7% this year and to 1.5% in 2018.

Strong global demand has also been a boon for the rest of Asia, where the fund forecasts sustained growth.

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Despite the good news, the report comes with a warning that the global recovery is far from complete with weak growth rates still persisting in several countries - particularly among fuel exporters hit by a fall in foreign earnings - and inflation still below the target rates in most advanced economies.