Published: Tue, October 22, 2019
Global News | By Blake Casey

India set to eclipse U.S. with global economic growth share by 2024

India set to eclipse U.S. with global economic growth share by 2024

"The outlook is highly uncertain and subject to elevated downside risks", including trade tensions, policy uncertainty and geopolitical risks, according to a communique issued Saturday by the International Monetary and Financial Committee, the steering panel of the IMF's 189 member countries. In five years, the South Asian nation will account for 15.5 percent of global growth, jumping two percent from the current figures.

The International Monetary Fund recently predicted that the global economy will grow by 3% this year, the weakest in a decade, and said 90% of the world is seeing a decline in growth.

"A multipolar world of competing and noncooperating great powers, which seems to be the stated objective of the Trump administration...is a very different world from the world that supported postwar growth over the past 70 years", said Maurice Obstfeld, a former chief economist at the International Monetary Fund.

The IMF forecast for 2020 is a sober read - suggesting global growth will rise to just 3.4 percent in 2020 from this year's three percent.

While the Trump administration has suspended a $ 250 billion tariff increase on Chinese products due to come into force last week, few details about the deal have been announced and more important details have not been disclosed.

"Businesses pay attention to geopolitics", he said on October 18 during a panel discussion at the Institute of International Finance annual meeting.

"But will that cause the United States to go into recession?"

"Growth is slowing, investment is sluggish, manufacturing activity is soft and trade is weakening", he said.

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Tao Zhang added that such growth rates were still "reasonable" given that China was going through a period of economic restructuring as it looked for a sustainable growth strategy.

According to Standard & Poor's, the US labor and housing market remain strong, as does consumer spending.

The credit rating agency recently downgraded its growth forecasts to 2.3 percent from 2.5 percent for this year, and to 1.7 percent from 1.8 percent for next year.

Other changes in the top five include Russian Federation pushing Japan off fifth place with its share of GDP growth expected to stay at its current level of two percent in 2024.

He went on to say that judging whether or not the US had been successful in its trade war with China would involve looking at whether or not it had achieved its aims of tackling "unfair and damaging practices", such as forced technology transfers.

Bovino noted that the sentiment measures in the United States have been running ahead of actual hard economic data. This stems from the repercussions of business confidence.

"We did not see it in the real economic data".

This dichotomy between hard data and sentiment readings could be driven by worries over negative headlines or uncertainties about trade and geopolitical tensions, she said, which cause people to believe a recession is about to hit the USA economy.

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