Developing economies could see slower-than-expected growth in 2017
IMF Lagarde says spillover effects of US politics, India’s withdrawal of banknotes could slow down growth
There is still some ambiguity over the implications of the anticipated trade measures that new US President Donald Trump announced during his election campaign. PHOTO: REUTERS
DAVOS, SWITZERLAND:
The prospects of global economic growth are better this year, the developing countries would grow at a slower-than-expected pace due to the withdrawal of high-denomination banknotes by India and spillover effects of US politics on Mexico, said Managing Director of the IMF, Christine Lagarde, Friday.
This is for the first time in recent years that the IMF has not revised the Gross Domestic Product growth rate downward, which is expected to remain at 3.4% in 2017, said Lagarde while speaking at a session on Global Economic Outlook. The session was arranged on the last day of the annual World Economic Forum Meeting.
The economic transformation of Pakistan through IT
Chancellor of the Exchequer of the UK, Finance Minister of Germany, Governor, Bank of Japan and Chief Executive Officer of the Blackrock USA also spoke on the occasion.
Global economic growth numbers are looking better this year than in the previous years, said Lagarde. She said that Japan and European Union economies were doing better and forecast for the US economy has also been upward revised.
However, growth forecast for emerging markets has been revised slightly downward, she added. The Indian economy will grow at less than earlier estimates due to negative effects of the withdrawal of banknotes on its economy, said the MD.
Last year, Indian Prime Minister Narendra Modi announced to withdraw large denomination banknotes, a move aimed as a crackdown against tax evasion.
She said that spillover effects of US politics on Mexico economy was another reason for downward revision of developing economies.
The IMF MD said that there was still some ambiguity over the implications of the anticipated trade measures that new US President Donald Trump announced during his election campaign. She said that a combination of trade restrictions and a tax package would not be good for the global economy.
The IMF MD said that the high possibility of strengthening of the US dollar will have implications for the companies that have borrowed in dollars.
Laurence D Fink, CEO of Blackrock, USA, said that trade restrictions by the new US administration would be an attack on those who have voted for Trump. He said any restriction on trade would carry implications for the US and global economy. He said some of the policies of the new administration would strengthen the US currency that will also have implications. We are going to live in a world of a strong dollar, he added.
Wolfgard Schäuble, the Finance Minister of Germany, said that the Eurozone was doing better now in terms of fiscal and monetary policies. However, he said that elections in some EU countries were important in terms of long-term stability. The finance minister said that consumer demand was also high compared with the previous years.
Growth in remittances nearly stagnated in developing countries with ‘exception’ of Pakistan
Phillip Hammond, the Chancellor of the Exchequer of the UK, said that the EU would likely to remain the largest trading partner of the UK after Brexit. He hoped that EU countries would avail highly efficient financial markets of the UK. The Chancellor made it clear that the UK was closed for unskilled workers after the Brexit.
He said that no system would be introduced to cut off the flow of skilled manpower and graduates coming to take degree courses in high ranking UK universities. He maintained that the UK would not accept the principal of free movement of people.
Governor of Bank of Japan, Haruhiko Kuroda, said that in Japan the unemployment rate has come down while core Inflation has become stable. However, he said that the companies were reluctant to increase wages even after increase in their profits and Japan will have to work on this area to achieve its economic targets.
Published in The Express Tribune, January 21st, 2017.
The prospects of global economic growth are better this year, the developing countries would grow at a slower-than-expected pace due to the withdrawal of high-denomination banknotes by India and spillover effects of US politics on Mexico, said Managing Director of the IMF, Christine Lagarde, Friday.
This is for the first time in recent years that the IMF has not revised the Gross Domestic Product growth rate downward, which is expected to remain at 3.4% in 2017, said Lagarde while speaking at a session on Global Economic Outlook. The session was arranged on the last day of the annual World Economic Forum Meeting.
The economic transformation of Pakistan through IT
Chancellor of the Exchequer of the UK, Finance Minister of Germany, Governor, Bank of Japan and Chief Executive Officer of the Blackrock USA also spoke on the occasion.
Global economic growth numbers are looking better this year than in the previous years, said Lagarde. She said that Japan and European Union economies were doing better and forecast for the US economy has also been upward revised.
However, growth forecast for emerging markets has been revised slightly downward, she added. The Indian economy will grow at less than earlier estimates due to negative effects of the withdrawal of banknotes on its economy, said the MD.
Last year, Indian Prime Minister Narendra Modi announced to withdraw large denomination banknotes, a move aimed as a crackdown against tax evasion.
She said that spillover effects of US politics on Mexico economy was another reason for downward revision of developing economies.
The IMF MD said that there was still some ambiguity over the implications of the anticipated trade measures that new US President Donald Trump announced during his election campaign. She said that a combination of trade restrictions and a tax package would not be good for the global economy.
The IMF MD said that the high possibility of strengthening of the US dollar will have implications for the companies that have borrowed in dollars.
Laurence D Fink, CEO of Blackrock, USA, said that trade restrictions by the new US administration would be an attack on those who have voted for Trump. He said any restriction on trade would carry implications for the US and global economy. He said some of the policies of the new administration would strengthen the US currency that will also have implications. We are going to live in a world of a strong dollar, he added.
Wolfgard Schäuble, the Finance Minister of Germany, said that the Eurozone was doing better now in terms of fiscal and monetary policies. However, he said that elections in some EU countries were important in terms of long-term stability. The finance minister said that consumer demand was also high compared with the previous years.
Growth in remittances nearly stagnated in developing countries with ‘exception’ of Pakistan
Phillip Hammond, the Chancellor of the Exchequer of the UK, said that the EU would likely to remain the largest trading partner of the UK after Brexit. He hoped that EU countries would avail highly efficient financial markets of the UK. The Chancellor made it clear that the UK was closed for unskilled workers after the Brexit.
He said that no system would be introduced to cut off the flow of skilled manpower and graduates coming to take degree courses in high ranking UK universities. He maintained that the UK would not accept the principal of free movement of people.
Governor of Bank of Japan, Haruhiko Kuroda, said that in Japan the unemployment rate has come down while core Inflation has become stable. However, he said that the companies were reluctant to increase wages even after increase in their profits and Japan will have to work on this area to achieve its economic targets.
Published in The Express Tribune, January 21st, 2017.