The International Monetary Fund (IMF) has upgraded its economic prediction for India this year, citing a slight improvement in global growth prospects, but warned that China's post-pandemic recovery has slowed down, reported Nikkei Asia.
According to the IMF's July World Economic Outlook update, India remains the world's fastest-growing major economy, with a 6.1 per cent expansion this year, up 0.2 percentage points from the IMF's April forecast. According to the IMF, India will contribute for around one-sixth of overall world growth this year. According to this week’s report, the upward revision was due in part to a stronger-than-expected finish to 2022 from strong domestic investment, as per Nikkei Asia.
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China will be the second-fastest growing global economy this year, at 5.2 per cent, but its recovery from the Covid-19 pandemic is losing steam, according to the IMF, which kept its prediction constant.
The IMF now anticipates global growth of 3 per cent this year, up 0.2 percentage point from April but still falling short of the 3.5 per cent growth recorded in 2022.
The update comes a day after China's Politburo hinted at measures to help the property industry, which the IMF recognised as a risk.
“In China, the recovery following the reopening of its economy shows signs of losing steam, while there are continued concerns about the property sector," said IMF chief economist Pierre-Olivier Gourinchas.
Aside from real estate issues, a slowing global economy means less demand for Chinese goods, further dampening the outlook.
"More could be done, in particular, to make sure that those pre-sold properties are delivered and that there is targeted support to families. That could really raise confidence, strengthen consumption, with positive implications for the region," Leigh said.
Emerging and developing economies, especially those in Asia, will be drivers for global growth this year as advanced economies slow, the IMF report showed, as per Nikkei Asia.
The IMF projects 5.3 per cent growth for emerging and developing economies in Asia this year, compared with 4.5 per cent in 2022. The so-called ASEAN-5 – Indonesia, Malaysia, the Philippines, Singapore and Thailand – are projected to grow 4.6 per cent.
Meanwhile, the United States is expected to expand 1.8 per cent this year, down from 2.1 per cent in 2022, while the Eurozone will decelerate dramatically from 3.5 per cent in 2022 to 0.9 per cent this year. Japan is expected to increase 1.4 per cent this year, making it one of the few advanced economies that will outperform in 2023.
(ANI)