The Task of Building Stronger, More Inclusive Growth
IMF News, March 18, 2017
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- Published: March 18, 2017
Global outlook
- Global growth is gaining momentum.
- Earlier this year the IMF projected growth would rise from 3.1 percent last year to 3.4 percent this year, and 3.6 percent in 2018.
- Emerging markets remain the main source of growth: for each 1 percentage point of global growth, about 0.7 percentage points is expected to come from emerging markets.
- Asia is leading with continued solid growth in China, India, and Indonesia.
- A pickup is expected in the United States, where some fiscal stimulus is anticipated.
- Europe is expected to continue its slow recovery.
Downside risks and near-term challenges
- Risk of a sharp tightening of financial conditions—potentially related to rising U.S. interest rates—that could trigger higher levels of capital outflows from emerging market countries.
- Political developments creating headwinds, including:
- backlash against economic integration,
- war and terrorism,
- refugee flows.
Structural and policy challenges
- Fundamental need to lift growth to higher levels and to ensure that the benefits of growth are shared more widely.
- Advanced economies with weak growth need:
- monetary or fiscal policies to help reignite demand,
- measures to address indebted companies and banks.
- Emerging markets also need economic reforms; China’s rebalancing effort is key for transition to more sustainable levels of growth and is "good for the world."
Making growth stronger and more inclusive
- Growth drivers: innovation and efficient allocation of resources.
- Acknowledgement that forces of change will be disruptive if not managed well, with potential economic and political consequences.
- Domestic policy responses to help those left behind:
- accelerate reforms to boost growth,
- expand education and training,
- strengthen social safety nets.
- Emphasis on international cooperation: reinforce commitment to economic cooperation to maximize benefits of growth and global integration and to create opportunities for all people.
- The IMF expresses commitment to this effort.
IMF Deputy Managing Director Tao Zhang — Remarks to the China Development Forum, March 18, 2017