China has overtaken the United States to become the biggest contributor to world
economic growth even as the China and India have emerged the new engines of world
economic growth, Rodrigo Rato, director of the International Monetary fund, said.
first time, the largest contribution to global growth will now be made by China,"
Rato said at a business conference in the Philippines. "Looking ahead, we
expect this pattern of growth to continue... We expect China - and increasingly
India - to grow in importance as engines of global growth," he added.
said China is expected to grow by over 11 per cent and India at around 9 per cent
this year and the next while the US economy would "regain momentum gradually
as the drag from the current housing correction and the softness in the business
the global economy had well absorbed the high oil prices driven by increased demand,
he said "a supply shock could be much more damaging to global growth."
cautioned against inflows of capital to emerging economies that could complicate
macro-economic management and expose the countries to volatility of capital flows.
Rato also warned
of the "danger of a backlash against globalisation" as many people felt
mainly benefited the wealthy and educated.
outlook for the global economy is generally good and the economic prospects of
most countries Europe, Japan and emerging Asia also remain good, he said.
best way to address global growth with inequality was to increase investment in
education and technology and give the poor more access to infrastructure, utilities
and financial services so they could also benefit from globalisation, Rato said.