Indian economy poised to pick up in 2019, says International Monetary Fund

Indian economy poised to pick up in 2019, says International Monetary Fund

The commodity-linked Canadian dollar weakened against its US counterpart on Monday after data showed a slowdown in China's economy and the International Monetary Fund cut its world economic growth forecasts.

The UK's GDP will grow by 1.5% this year, should it secure an agreement to leave the European Union, and 1.6% in 2020 - 0.1 percentage points higher than previously forecast, while Germany will slump to 1.3% in 2019, down 0.3 percentage points, before recovering to 1.6% in 2020.

The new forecasts, released on the eve of this week's gathering of world leaders and business executives in the Swiss ski resort of Davos, show that policymakers may need to come up with plans to deal with an end to years of solid global growth.

Growth in emerging and developing Asia will dip from 6.5 per cent in 2018 to 6.3 per cent in 2019 and 6.4 per cent in 2020, it said.

"This baseline projection assumes that a Brexit deal is reached in 2019 and that the United Kingdom transitions gradually to the new regime", the International Monetary Fund said in its World Economic Outlook Update Monday.

'We have done our estimates of what it would, how costly it would be to the British economy to have a no-deal Brexit, which would be a reversal to WTO rules, and that would be a decline in long-run output of about, or long-run GDP, of between five to eight percentage points'.

This brought growth for the whole year to 6.6 per cent, down from 6.8 per cent in 2017.

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The IMF further expected South Africa's economy to grow by 1.7 percent next year.

The IMF report says that India's economy is poised to pick up in 2019, benefiting from low oil prices and a slower pace of monetary tightening than previously expected as inflation pressures ease.

"For both years, the projection is 0.3 percentage point lower than last October's projection, as softening oil prices have caused downward revisions for Angola and Nigeria".

The IMF said India's growth rate in 2018 was 7.3 per cent.

"India should return to a healthy growth rate of 7.6 per cent in 2019-20, if there are no major headwinds in the global economy such as enhanced trade tensions or supply side shocks in oil".

The World Bank and the Organization for Economic Cooperation and Development have also downgraded their world growth forecasts. Under President Donald Trump, the USA has imposed import taxes on steel, aluminum and hundreds of Chinese products, drawing retaliation from China and other US trading partners.

It urged countries "to resolve cooperatively and quickly their trade disagreements" and the resulting policy uncertainty, "rather than raising harmful barriers further and destabilising an already slowing global economy".

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