The International Monetary Fund said the global economy is on a real upswing-so much so that the IMF is boosting its forecasts for global growth.
But it said that this sweet-spot in the economic cycle is also masking some major underlying issues that still need to be addressed.
CGTN’s Daniel Ryntjes reports.
With global growth now forecast at 3.6 percent this year and 3.7 percent for the next, the big picture is a resurgence in investment, trade and industrial production, according the IMF’s World Economic Outlook report. This year Europe, the United States and Japan have performed better than expected, and some commodity exporters including Russia and Brazil are also firmly on the road to recovery.
“The picture is very different from early last year when the world economy faced faltering growth and financial market turbulence. We see an accelerating cyclical upswing, boosting the major economies including Europe, China, Japan and the United States, as well as emerging Asia,” IMF’s Research Department Director, Maurice Obstfeld explained.
The IMF sees China continuing its pivotal role as an engine of global growth, as it also boosts domestic demand, while recommending actions to slow the pace of credit expansion.
India’s growth projections have been reduced, reflecting problems related to two major economic policy programs there. But overall, the fund’s economists see positive trends for much of emerging Asia. “Policy makers should seize the moment. The recovery is still incomplete in important respects and the window for action that the current cyclical upswing offers will not be open forever,” Obstfeld said.
There’s concern that some lower-income commodity exporters like Nigeria and South Africa are still struggling to adjust their economies to the reality of lower energy prices. The IMF says the global recovery is “still incomplete.” It’s recommending worldwide a greater push to tackle rising income inequality, an aging workforce in places like Japan and in Europe, and investments in youth training to improve the workforce of the future.
The IMF has shifted its focus away from just the bare numbers on global growth toward the quality of that growth, so that it can be more sustainable, and inclusive, going forward.
Saruhan Hatipoglu disects the IMF’s growth report
Saruhan Hatipoglu, CGTN’s Global economics analyst, breaks down the IMF’s global growth report with CGTN’s Rachelle Akuffo.