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INDIA, CHINA WOULD FARE BETTER AMID SLOWER WORLD GROWTH: IMF

The Economic Times, Apr 10, 2008

WASHINGTON: India, China and other emerging economies are likely to weather better the unfolding financial market turmoil even as global growth decelerates in 2008, led by a sharp slowdown in the US, says the International Monetary Fund (IMF).

The IMF expects world growth to slow to 3.7 per cent in 2008 - 0.5 percentage point lower than what was forecast in the January 2008, says its latest Economic Outlook update released here on Wednesday.

The April 2008 report cites the turbulent financial market amid a housing correction and a financial crisis that has quickly spread from the US sub-prime sector to core parts of the financial system, as the biggest downside risk to the global economy.

Further, world growth would achieve little pickup in 2009, and there is a 25 per cent chance that the global economy will record three percent or less growth in 2008 and 2009, equivalent to a global recession. By contrast, the rapidly globalising emerging economies have so far been less affected by financial market turbulence and have continued to grow at a rapid pace, led by India and China, although economic activity is beginning to moderate in some countries.

Nevertheless, growth across all emerging and developing regions will remain above trend, says the IMF report released ahead of the World Bank-IMF spring meetings over the weekend.

China and India - which grew at 11.4 per cent and 9.2 per cent respectively in 2007 - are projected to grow at 9.3 per cent and 7.9 per cent respectively in 2008.

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