India will regain rank as fastest growing economy in 2018-19

International Monetary Fund Managing Director Christine Lagarde delivers opening remarks at the IMF’s 17th Jaques Polak Annual Research Conference

IMF: Trump Tax Reform Will Accelerate Growth in US and Around the World

The IMF also revised upward the growth of global output in 2017 to 3.7 percent, which is 0.1 percentage point faster than that projected in the fall and 0.5 percentage point higher than in 2016. "The recent US tax legislation will contribute noticeably to USA growth over the next few years, largely because of the temporary exceptional investment incentives that it offers".

Many economists expect growth to continue into 2018 but question its sustainability given geopolitical tensions and the extent that income inequality and meagre productivity remain entrenched globally. Notably, with a growth rate of 7.

The study also finds that the tax reform in the United States and the fiscal stimulus that flows from that will also spillover favorably into America's trading partners-particularly Mexico and Canada.

The worldwide lending agency says 120 countries, representing three-quarters of world economic output, enjoyed economic growth in 2017, creating the broadest global expansion in seven years.

The International Monetary Fund Monday revised up its forecast for world economic growth in 2018 and 2019, saying sweeping USA tax cuts were likely to boost investment in the world's largest economy and help its main trading partners.

Lagarde made the remarks during the presentation of the updated World Economic Outlook within the annual meeting of the World Economic Forum in Davos, Switzerland Jan. 22.

The IMF expects the US growth to accelerate to 2.7 percent this year, from 2.3 percent in 2017, citing increased investment as businesses take advantage of lower corporate tax rates.

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The Office for National Statistics will reveal its preliminary estimate for growth in the final quarter of 2017, and also the full calendar year, on Friday. Mexico's economy will be 0.4 points stronger this year and 0.7 points stronger in 2019. China, during the same period is expected to grow at 6.6% and 6.4% respectively, the IMF said.The IMF said, the aggregate growth forecast for the emerging markets and developing economies for 2018 and 2019 is unchanged, with marked differences in the outlook across regions.It projected India to grow at 7.4% in 2018 as against China's 6.8%.

"The expected global macroeconomic effects account for around one-half of the cumulative upward revision to the global growth forecast for 2018 and 2019, with a range of uncertainty around this baseline projection".

However, the rosier outlook came with a major caveat for financial markets, which the International Monetary Fund warned could be at the risk of a confidence-shaking correction.

The current cyclical upswing provides an ideal opportunity for reforms. Multilateral cooperation remains vital for securing the global recovery.

At first glance, that was but a small change, but it was more notable when compared with the growth predicted for other large advanced economies.

At the same time, the International Monetary Fund said the cyclical upswing in global economic activity provides "an ideal opportunity" for countries to undertake structural reforms aimed at boosting productivity and building resilience against downside risks. In an environment of financial market optimism, ensuring financial resilience is imperative, the report said. These have risen by about 20 percent between August 2017 and mid-December 2017, to over $60 per barrel, with some further increase as of early January 2018.

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