North Korea Be Damned! IMF Sees Best Global Growth In 5 Years
The warning came as the global crisis lender forecast the world's largest economy will grow 2.3 per cent this year, and 2.5 per cent in 2018, unchanged from the estimates in the January edition of the IMF's World Economic Outlook.
The World Economic Outlook was released here before the start of the annual Spring Meeting of the International Monetary Fund and World Bank.
In contrast, second-ranked France, which has struggled to get its economy going, will rise to 1.4 percent this year - also up 0.1 of a point compared with January - from 1.2 percent in 2016.
The IMF raised significantly its forecast for 2017 British growth as the economy performs better than expected since the country voted previous year to quit the European Union.
The growth forecast for the USA for this year was raised to 2.3% from 2.2% and that for the euro area was increased to 1.7% from 1.5%.
"This forecast assumes continued strengthening of growth in commodity exporters; an acceleration of activity in India resulting from the implementation of important structural reforms; and a successful rebalancing of China's economy to lower, but still high, trend growth rates", said the report.
"Growth is projected to remain robust at 6.8 percent in 2017 and 6.9 percent in 2018, led by strong domestic demand and a recovery in exports", Peiris said.
"Consistently good economic news since summer 2016 is starting to add up to a brightening global outlook", he said.
Just three months ago, the International Monetary Fund predicted growth of 1.5% this year, and 1.4% the year after.
In the October 2016 edition of the report, the International Monetary Fund said it expected the country's consumer prices to rise 0.8% this year.
China's debt-to-GDP ratio rose to 277 percent at the end of 2016 from 254 percent the previous year, with an increasing share of new credit being used to pay debt servicing costs, according to an estimate from UBS.
"The world economy may be gaining momentum, but we can not be sure that we are out of the woods", said Mr. Obstfeld.
"Trade has been an engine of growth, promoting impressive per capita income gains and declines in poverty throughout the world, especially in poorer countries", Obstfeld said.
Global trade has fostered "economic miracles" around the world, driving growth and lifting millions out of poverty, he stressed.
This is 0.5 percentage points higher than the 1.5 per cent growth predicted in January and 0.9 points higher than the GDP growth predicted in October. The organisation said negative effects from the vote, including reduced consumer purchasing power, will likely materialise at a slower rate than initially anticipated.
The Fund listed six downside risks including: protectionism; faster than expected interest rate increases in the United Kingdom leading to financial market disruption; an aggressive rolling-back of financial regulation leading to excessive risk taking; and the vulnerability of China's financial system after a period of rapid credit growth.
The agency, however, projected that the US economy is expected to grow at 2.3 per cent in President Donald Trump's first year in office.
However, the foreword to its report contains a series of comments that appear aimed at Donald Trump's rhetoric of protecting American jobs.
Peiris also stressed that further enhancing competition and opening up the economy to foreign investment would raise competitiveness and help create high-quality jobs.