The International Monetary Fund (IMF or fund) has increased its outlook for global economic progress, attributed to a post-election rise in assurance in the US, enhanced prospects in the emerging flourishing markets, and success in international trade (Thomas par. 1). The glowing prediction indicates an occurrence of a change in circumstances for the fund as it has been subdued in the recent past concerning the ability of the international economy to ensure continued growth. In the issuance of the spring edition of the IMF’s World Economic Outlook, a report on the global economy that is delivered numerous times every year, the International Monetary Fund’s economists were keen on warning against protectionist inclinations in the developed countries. The IMF foresees a 4% rate of increment in 2017 when judged against a 3% rise in 2016.
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Being the strongest supporter of traditional free-trade strategies, the International Monetary Fund has, for nearly one year so far, been raising the concern that successful trade, devoid of protective hindrances such as duties and tariffs, is imperative to a strong global economy. Through speeches, reports, and concerns articulated in private, the International Monetary Fund has not done much to mask its dread that anti-trade discourse could disrupt an international monetary upturn. Maurice Obstfeld, the IMF’s principal economist, stated that amid the most salient threats is trade protectionism as it results in trade conflict (Thomas par. 8). Regardless of the arising fears, several pointers that encompass export enhancement in Asia, as well as the increased requirement for container ships, demonstrate that international trade is getting better. Following a 2% growth in 2016, the international trade volume is expected to increase by 3.8% in 2017, and 3.9% in 2018, as projected by the International Monetary Fund.
The IMF forecasts that the economy of the US will rise by about 2% in 2017 and approximately 3% in 2018 up from just 1.6% last year. Moreover, developing countries were anticipated to expand by about 4.5% in 2017 and 4.8% next year, a striking improvement from nearly 4% growth last year. An upsurge of continued optimistic data has been evident since mid last year. The rise in industrial practices, trade, and manufacturing is leading to enhanced assurance that 2017 and 2018 will be considerably better when judged against last year. In the IMF assessment, an increment was cited concerning the prices of commodities in addition to indications of augmented investment expenses as the rationales behind the better stance in the emerging markets. A high proportion of the demand has been propelled by China, whose economy has grown by almost 7% in the first quarter of 2017, the highest level since 2015 (Thomas par. 15).
Economists affirm that the greatest force behind the augment inactivity is an enhancement in the public and private ventures. Recent statistics asserting that Chinese imports have expanded by 20% underscore the boom in expenses. In its report, the International Monetary Fund foresees a situation where the economy of China will rise a bit sluggishly in 2017, by 6.6% when judged against 6.7% last year (Thomas par. 17). Irrespective of the recent economic growth, most economists are convinced that an increment of about 7% cannot be sustained and that the recent indications of a credit slowdown are evidence that the economy of China will decrease in the coming years. The IMF also established that overreliance on credit by China poses numerous risks, particularly concerning enhanced growth.
Thomas, Landon Jr. “I.M.F. Raises 2017 Outlook for Global Economic Growth.” The New York Times, 2017, Web.