By Bhavana Akella
“The cyclical recovery in the global economy is going from strength to strength. The signs point to faster growth across all regions,” International Monetary Fund’s (IMF) First Deputy Managing Director David Lipton said at the Asian Financial Forum.
Addressing the Forum’s 11th edition, he also said that India was reclaiming its place as a growth leader.
“India is reclaiming its place as a growth leader after a short slowdown,” Lipton told about 3,000 delegates from the world over participating in the two-day event, being held at the Hong Kong Convention Centre in the downtown.
Announcing that the multi-lateral lending agency IMF would give its world economic outlook for 2018 next week, he said the global economy was in a late stage of recovery from the global financial crisis of 2008.
“With economic slack in advanced economies diminishing, it is not clear how long the good news will continue.
“Now is the time to address vulnerabilities and structural issues that could impede sustained growth, and to take steps to enable stronger growth once cyclical growth is no longer driving the economy,” he said.
The “sun is shining” on the global economy with rising investments and consumer demand, he said.
Investments are lifting world trade at a rate above the Gross Domestic Product (GDP) growth, the IMF official noted.
With the economies in the US and Europe rebounding, unemployment in many developed countries is reducing, added Lipton.
“Asia contributes two-thirds of global growth. With strong consumption and investment, rising exports and steady capital inflows, the outlook for the region remains bright,” he said.
According to IMF, China alone contributes to a third of the global growth.
“China is a key trading partner for over 100 countries that represent 80 per cent of the global GDP,” said Lipton.
But, the global economy also faces the challenge of rising geopolitical tensions amid countries, he warned.
“Wage growth remains weak in many advanced economies, and productivity growth is lagging,” he said.
A “significant” portion of the global economy was not participating in the recovery, with several oil exporters seeing low prices even as their economies rebound, said Lipton.
IMF’s projections foresee that over 40 countries including some major emerging market countries would grow more slowly than advanced countries.
“Some developing countries also seem likely to face difficulties from the burden of rising indebtedness,” Lipton said.
Lipton is one of the keynote speakers at the annual financial summit that is being attended by at least 100 speakers from the global financial community, and about 3,000 delegates attending from nearly 50 countries like China, Hong Kong and the US.
(Bhavana Akella is in Hong Kong at the invitation of Hong Kong Trade Development Council)