IMF raises China growth forecast to 6.6% in 2017, 6.2% next year

IMF raises China growth forecast to 6.6% in 2017, 6.2% next year”

Ahead of a meeting of world finance chiefs in Washington this week, the International Monetary Fund released on Tuesday its flagship report on the world economy, forecasting the USA economy would grow at 2.3% this year and 2.5% in 2018 - a faster pace than last year's 1.6%.

In its latest World Economic Outlook, the International Monetary Fund forecast the global economy will grow by 3.5 percent in 2017, an acceleration from the 3.1 percent growth past year and an upgrade of 0.1 percentage points from its January projection. "Growth is projected to rise to 2.6 percent in 2017 and 3.5 percent in 2018, largely driven by specific factors in the largest economies, which faced challenging macroeconomic conditions in 2016", the outlook noted.

However, Obstfeld said the global economy seems to be gaining momentum.

The agency, however, projected that the US economy is expected to grow at 2.3 per cent in President Donald Trump's first year in office. Its 2018 forecast falls below the 7 percent to 8 percent target of the government.

The Italian economy will grow by 0.8% both this year and next, according to estimates from the "World Economic Outlook", nearly unchanged compared to those of January.

The growth forecast for China for this year was increased to 6.6% from 6.2%.

However, Obstfeld noted, a quick recovery in the USA could mean faster interest rate hikes and rises for the U.S. dollar, putting other economies with a United States dollar-dependent exchange rate or hefty dollar-denominated debts under pressure.

"Growth.remained solid in the United Kingdom, where spending proved resilient in the aftermath of the June 2016 referendum in favour of leaving the European Union", the International Monetary Fund said.

The IMF said the expected growth improvements for this year and the next are broadly based, although growth remains tepid in many advanced economies, while the export industry continues to struggle.

"Protectionist policies in advanced economies would have an overall negative impact in Asia, including the Philippines, but the magnitude of impact and channels would depend on the specific policies that are still uncertain", Peiris said. U.S. President Donald Trump has plans to soften rules for banks as he believes that the current regulation hinders lending to the real economy.

"These problems could, in turn, spill over to other countries", Obstfeld said. Projected global growth is set to rise to 3.5% from 3.1%.

And French vehicle parts maker Faurecia SA said first-quarter sales rose 9.8% on strong growth in the USA and China.

The U.S. says its policies or threats don't amount to protectionism, but rather are an effort to rebalance distorted trade relationships.

Economic growth in China, the world's second largest economy, has also come at a cost of an unprecedented credit buildup that many economists warn could mean much weaker growth ahead and even financial turmoil.

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