International Monetary Fund predicts India will surpass China's growth rate in 2018


"While the near-term outlook is good, the mid-term outlook is more worrying, and a recession may be nearer than we think", she said while releasing an update to the IMF's global economic outlook here at the World Economic Forum.

The global economy is now expected to grow 3.9 percent this year and next, two-tenths higher than the previous estimate, and up from 3.7 percent in 2017.

The IMF maintains its growth prediction for the United Kingdom in 2018 at 1.5% but cuts its forecast for 2019 by one tenth of a percentage point, to 1.5% as well.

The eurozone economy is expected to grow by 2.2% this year and 2% in 2019, up from earlier estimates of 1.9% and 1.7%.

Key emerging market and developing economies, including Brazil, China and South Africa, also posted third-quarter growth stronger than the fall forecasts.

Launching the report, Christine Lagarde, Managing Director, International Monetary Fund, said: "Global growth has been accelerating since mid-2016, and all signs point to a further strengthening both this year and next".

"The primary sources of [global] GDP acceleration so far have been in Europe and Asia, with improved performance also in the United States, Canada, and some large emerging markets, notably Brazil and Russian Federation, both of which shrank in 2016, and Turkey", Obstfeld said.

In the year gone by, China (6.8%) was ahead of India (6.7%), giving China the tag of being the fastest growing emerging economies, as has been the case for major parts of the past several decades. Consistent with these plans, the country s ongoing and necessary rebalancing process implies lower future growth, he said at a news conference in Davos. "But we should also use this time to find lasting solutions to the challenges facing the global economy in 2018". It projected a growth of 7.8 percent in 2019-20.

According to the IMF's latest report, the world economy is gathering speed with growth forecast for 2018 and 2019 pegged at 3.9 per cent even as it warned that the present economic momentum reflects a "confluence of factors" that is unlikely to last for long. The 2018 forecast was unchanged at 1.5 percent.

In its WEO update, the International Monetary Fund said the cyclical upswing underway since mid-2016 has continued to strengthen.

Secondly, shared opportunities that will lead to inclusive growth, particularly in the area of human capital development and skills for a tech driven globe. World trade is expanding, and consumers are more confident.

Risks to the global growth forecast appear broadly balanced in the near term, but remain skewed to the downside over the medium term.

Ironically, the stronger growth could provide the seeds of a possible reversal if it triggers faster-than-expected inflation in advanced economies, and a quicker increase in interest rates.