Egypt's FY2017/18 GDP growth projected at 4.5 pct -IMF report

Scott Morrison will attend the IMF and World Bank annual meetings in Washington on October 13-14

The IMF overturned a summer downgrade to forecast the United States economy would now grow by 2.2% this year, with total world growth expectations rising 0.1% to 3.6% as a "global cyclical upswing" continued.

On October 9, a forecast by the Organisation for Economic Cooperation and Development (OECD) showed that the global economy will continue to grow at a strong pace in the last months of this current year, and will keep this up momentum into 2018.

The growth outlook in the United States was unchanged from the Fund's July report at 2.2 percent for this year and 2.3 percent in 2018, as expected tax cuts under President Trump's administration have not yet materialized. The upward revisions in its growth forecasts including for the euro area, Japan, China, emerging Europe, and Russian Federation more than offset downward revisions for the United States, the United Kingdom, and India.

India's growth rate in 2016 was 7.1 per cent, which saw an upward revision of 0.3 percentage points from its April report.

The fund expects China's economy to expand by 6.8 per cent this year, up from its previous estimate of 6.7 per cent, due to stronger recorded growth in the first half. "The outlook for advanced economies has improved, notably for the euro area, but in many countries inflation remains weak, indicating that slack has yet to be eliminated, and prospects for growth in GDP per capita are held back by weak productivity growth and rising old-age dependency ratios".

In July's outlook, the growth forecast for next year was lowered one percentage point to 3.4 per cent from 4.4 per cent in April, owing to an easing of oil growth to 3.2 per cent, compared with 6.2 per cent in the April forecast.

Releasing the report in Washington, IMF Research Director Maurice Obstfeld said: "The global recovery is continuing, and at a faster pace". It also called for briding the gender gap in accessing social services, finance and education to accelerate growth in developing countries like India.

In July, the International Monetary Fund said the introduction of a five per cent value added tax (VAT) from January 2018 would not have a "significant adverse impact" on growth.

"In advanced economies, monetary policy settings should remain accommodative until there are firm signs of inflation returning to targets.(as) still-subdued wage pressures mostly reflect remaining slack, not fully captured by headline unemployment rates", the Fund said.

It also warned of food shortages and drought in The Gambia, South Sudan and Somalia.

Draghi has maintained the ECB's stimulus programme over the past year despite robust economic growth in the eurozone, while Yellen postponed a rate hike in September.

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