The International Monetary Fund (IMF) has raised its world economic growth
forecast for 2007 and 2008 to 5.2 per cent, up 0.3 per cent from the 4.9 per cent
growth forecast for both years in its World Economic Outlook (WEO), published
IMF hiked the growth forecast by 0.3 percentage points on the back of robust growth
in emerging markets, with China poised to become its most powerful growth driver.
the revised estimates, China will see growth of 11.2 per cent in 2007, 1.2 percentage
points higher than forecast in April. The IMF also revised India''s growth rate
upward by 0.6 points to 9.0 per cent, and Russia''s to 7.0 per cent.
global economy continued to expand at a brisk pace in the first half of 2007,"
the IMF said in a statement.
major upward revisions have been for emerging market and developing countries,
with growth projections substantially marked up for China, India and Russia."
lowered its 2007 forecast for the United States, the world''s biggest economy by
0.2 points to 2.0 per cent.
growth in the United States slowed in the first quarter, recent indicators suggest
that the economy regained momentum in the second quarter," the IMF said.
It also predicted US economy''s "return to potential by mid-2008."
US growth forecast for 2008 was left unchanged at a 2.8 per cent.
Japan, the world''s second-biggest economy, the IMF raised its growth forecast
to 2.6 per cent in 2007, up 0.3 percentage points, and to 2.0 in 2008, up 0.1
the IMF expects the 27-nation euro to expand at a faster rate of 2.6 per cent
in 2007 and 2.5 per cent in 2008, up 0.3 points and 0.2 points, respectively.
The upward revision
was based on a 2.6 per cent growth expected in Germany, Europe''s largest economy,
in 2007 and by 2.4 per cent in 2008, up 0.8 points and 0.5 points respectively.
provides one quarter of the annual growth rate of the world economy, and "if
you add together Russia and India as well, you get over half of global growth
coming from the emerging market countries," Charles Collyns, the IMF deputy
director of research, said at a news conference.
said the IMF was also "expecting quite a sharp bounceback" in the US
economy in the April-June period.
remains generally well contained despite strong global growth, although some emerging
market and developing countries have faced rising inflation pressures, especially
from energy and food prices," IMF said.
IMF forecast a 2.0 per cent rise in consumer prices in the advanced economies
in 2007, up 0.2 points, and a 5.7 per cent increase in emerging markets, a gain
of 0.3 points.
inflation risks have edged up since the April 2007, IMF saw an increasing likelihood
that central banks will need to further tighten monetary policy. The Fund also
signaled a growing risk on financial markets "as credit quality has deteriorated
in some sectors and market volatility has increased."