“India’s growth is expected to strengthen from 7.3 per cent this year and last year to 7.5 per cent next year”.
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“In an environment of declining commodity prices, reduced capital flows to emerging markets and pressure on their currencies, and increasing financial market volatility, downside risks to the outlook have risen, particularly for emerging market and developing economies”, it said. In Japan, the organization projects economic growth of 0.6% this year and a full 1.0% in 2016. They’re set to see much slower growth than they’re used to for the fifth year in row.
The fact that the focus is increasingly on emerging economies does not mean the International Monetary Fund thinks all is rosy in the rich countries.
Earlier this week the International Monetary Fund downgraded its forecast for global growth in 2015 to 3.1%, which would mark the weakest performance since the trough of the downturn in 2009.
The report warned that the revised global growth forecasts “underscore the challenges all countries face” although it singled out emerging economies as those facing both medium- and long-term “common forces”.
Commenting on the latest WEO report, Bank Indonesia (BI) senior deputy governor Mirza Adityaswara said that the China factor would play an important role in next year’s growth, acknowledging that falling import demand from China had pushed down commodity prices.
Azerbaijan’s balance of payments surplus will be three percent of GDP in 2015, 2.7 percent of GDP in 2016 and 5.1 percent of GDP in 2020.
Among those hardest hit by the commodities bust: The Brazilian economy, forecast to contract by 3 percent this year; and Russia, forecast to shrink 3.8 percent because of lower oil prices and economic sanctions imposed by the West as punishment for Russian aggression in Ukraine.
The Washington-based institute predicted that economic problems in emerging markets – for example a credit crunch in China – could trigger a “contagion” that spreads to developed economies.
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The stark warning follows a turbulent summer sparked by the devaluation of China’s economy in an effort to increase its exports. The fund went on to advise that the United States raise interest rates gradually after waiting for clear inflation signals and improvements to the labor markets. Asia’s growth should benefit from relatively strong labour markets and disposable income growth along with the ongoing gradual recovery in major advanced economies.
