Davos, Jan 22: The International Monetary Fund (IMF) said on Monday that India’s gross domestic product(GDP) will grow by 7.4 percent in 2018; while China’s GDP growth will be 6.8 percent– thus, India will surpass China to be the fastest growing economy in the world. Also Read - Economic Distress, Social Discontent Will Rise Over Next 18 Months Due to COVID-19: WEF
The IMF released World Economic Outlook update at the World Economic Forum in Davos. It pegged GDP growth rate at 7.4% in 2018 and 7.8% in 2019. In the same period, China is expected to grow at 6.8% and 6.4% respectively. Also Read - Donald Trump Offers to Mediate on Kashmir Issue Again Ahead of Meeting Imran Khan in Davos
The IMF further said that Asia will grow at 6.5 percent in 2018-19, which is the same pace as in 2017. It said that growth will be moderate in China, but will pick up in India. (Also read: GDP estimates lower due to malnutrition: Study) Also Read - 'There's Hope'! Deepika Padukone's Beautiful Acceptance Speech at Davos 2020 About Mental Health is Important
“Emerging and developing Asia will grow at around 6.5 percent over 2018–19, broadly the same pace as in 2017. The region continues to account for over half of world growth. Growth is expected to moderate gradually in China (though with a slight upward revision to the forecast for 2018 and 2019 relative to the fall forecasts, reflecting stronger external demand), pick up in India, and remain broadly stable in the ASEAN-5 region,” it said.
The IMF further said that the global economic output was faster than what was estimated in 2017. The growth has been due to the hike in growth in Europe and Asia. The global growth forecast has been revised upward by 0.2 percentage point to 3.9 percent.
“Global economic activity continues to firm up. Global output is estimated to have grown by 3.7 percent in 2017, which is 0.1 percentage point faster than projected in the fall and ½ percentage point higher than in 2016. The pickup in growth has been broad based, with notable upside surprises in Europe and Asia. Global growth forecasts for 2018 and 2019 have been revised upward by 0.2 percentage point to 3.9 percent. The revision reflects increased global growth momentum and the expected impact of the recently approved U.S. tax policy changes,” it added.
However, Maurice Obstfeld, IMF Economic Counsellor and Director of Research briefing media on the key findings of the WEO update, had a word of caution.
“As the year 2018 begins, the world economy is gathering speed. This is good news. But political leaders and policymakers must stay mindful that the present economic momentum reflects a confluence of factors that is unlikely to last for long,” he said.
“The global financial crisis may seem firmly behind us, but without prompt action to address structural growth impediments, enhance the inclusiveness of growth, and build policy buffers and resilience, the next downturn will come sooner and be harder to fight,” Obstfeld added.