The OECD expects the global economy to maintain growth momentum in 2018

Trevor Jackson
October 11, 2017

The IMF says the global economy is gaining strength, with growth marked up at 3.6% this year and 3.7% for 2018.

Releasing the report in Washington, IMF Research Director Maurice Obstfeld said: "The global recovery is continuing, and at a faster pace". Kuwait will record the fastest growth within the GCC at 4.1 per cent in 2018 following negative growth of 2.1 per cent in 2017. Forecasts for eurozone, Japan, China, emerging markets and Russian Federation were all revised upwards.

This year's growth projection is 0.5 percentage points less than its previous two forecasts in April and July, attributing it to demonetisation and introduction of the GST.

"Both private consumption and exports are expected to remain buoyant going forward, while hurdles to budget execution are also gradually being overcome", AMRO said.

The IMF lowered India's forecast growth to 6.7 per cent from the 7.2 per cent predicted in July.

The report projected India to regain the top spot next year with a 7.4 percent gross domestic product (GDP) growth rate.

The program, updated annually, saw growth at 5.5 percent between 2018 and 2020.

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Such a performance would mean the economy falling behind its biggest rivals in growth terms after being the second-fastest in the G7 past year despite the Brexit vote.

The IMF said that it only expects the United Kingdom to outperform a small handful of its peers this year, including with Italy which is expected to grow by 1.5 per cent, France, by 1.6 per cent and Japan by 1.5 per cent.

The news comes at a time when G20 finance ministers and central bank governors are gathered in Washington for the semi-annual meeting of the International Monetary Fund and the World Bank.

Russia's central bank has tried to reinvigorate the economy by gradually reducing the key interest rate, with its latest cut in September - the fourth this year - putting it at 8.5 percent. It also called for briding the gender gap in accessing social services, finance and education to accelerate growth in developing countries like India. The IMF didn't alter its forecasts for the United Kingdom, keeping expected GDP growth at 1.7% and 1.5% for this year and next, respectively.

In its monetary policy review last week, the Reserve Bank of India kept its policy rates unchanged and marginally raised its inflation forecast for rest of the year.

"While most of the world is sharing in the current upswing, emerging market and low-income commodity exporters, especially energy exporters, continue to face challenges, as do several countries experiencing civil or political unrest, mostly in the Middle East, North and sub-Saharan Africa, and Latin America", said Obstfeld.

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