International Monetary Fund raises China growth forecast for 2017 to 6.8%

International Monetary Fund raises China growth forecast for 2017 to 6.8%

The report says the global economy is experiencing a "welcome cyclical upturn after disappointing growth over the past few years".

The IMF predicted weak growth of 0.7 percent in South Africa in 2017, saying "heightened political uncertainty" in the ruling ANC party had hit confidence despite good agricultural production.

Elsewhere in Asia, the fund raised Japan's growth forecast to 1.5 per cent this year from 1.0 per cent last year.

"Given the significant policy uncertainty, IMF staff's macroeconomic forecast now uses a baseline assumption of unchanged policies, whereas the April 2017 WEO (World Economic Outlook) built in a fiscal stimulus from anticipated tax cuts", the Fund said in its revisions to its US economic forecasts.

The UK is also the exception among advanced economies when it comes to inflation.

According to the Ministry of Strategy and Finance, the IMF's positive outlook is based on expectations of improvement in global trade and larger import demand in China. This week's IMF/World Bank gatherings in Washington are the last worldwide meeting of this kind attended by outgoing Finance Minister Wolfgang Schaeuble. Investors have been basking for some time, with the MSCI world stock index up 15 percent this year.

The IMF bumped up its forecast for USA growth to 2.2 percent in 2017 and 2.3 percent in 2018 from 2.1 percent for both this year and next in its July estimates. The IMF's base case doesn't take into account fiscal stimulus from tax reforms backed by President Donald Trump and Republican leaders in Congress.

The fund expects China's economy to expand by 6.8 per cent this year, up from its previous estimate of 6.7 per cent, due to stronger recorded growth in the first half.

The IMF projects Japan will grow 1.5 percent this year, up 0.2 point from July, before downshifting to 0.7 percent in 2018, which is still 0.1 point higher than anticipated three months ago.

"Recent economic progress provides a global environment of opportunity, and policymakers should not let their chance go to waste". In rich nations, central banks should keep monetary policy loose until there are firm signs of inflation, the fund said.

"Strong government spending and data revisions in India led to an upward revision of 2016 growth to 7.1 per cent (6.8 per cent in April), with upward revisions of about 0.2 percentage point, on average, for 2014 and 2015", it said.

Economic growth in Britain for 2017 had already been revised sharply lower by the Fund to 1.7 percent in the wake of the country's vote to leave the European Union and so-far inconclusive talks on Brexit.

Countries should take steps to improve productivity while putting in place policies that reduce the pain of adjustment to labor-saving technology and globalization, the International Monetary Fund said.

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