World Economy

IMF Optimistic About Growth

Cambodia’s economic outlook remains positive, but is subject to downside risks.Cambodia’s economic outlook remains positive, but is subject to downside risks.

The IMF Managing Director Christine Lagarde expressed optimism about the Chinese economy and assured that there is no reason to worry about Beijing’s expectations of growth slowdown to 6.5% in 2018 compared to 6.9% in 2017.

“Chinese economic growth has been very strong for many years, making truly unbelievable achievements, pushing hundreds of millions of people out of poverty for two decades”, Lagarde said. “This led to development, which was completely unexpected several years earlier. It has moved from a completely closed economy to a fully open economy”, news outlets reported.

“After the massive development and mass transformation, controlled by the Chinese authorities, it is now good for the economy to grow by 6.5%”, she said.

Chinese Prime Minister Li Keqiang announced in beginning of March that China reaffirms its economic growth target of about 6.5% in 2018, as the target for 2017 but with the intention of achieving more if possible. Last year, growth accelerated to 6.9%. The economic growth of 6.5% will be the weakest in China for 28 years, IMF press release said Sunday.

Lagarde pointed out that now China is focusing on the internal market that is not so dependent on exports and more on consumption than on development. “This is not an economy that slows down”, she said, recalling that it is “the second largest economy in the world”.


Cambodia's near-term economic outlook remains positive with gross domestic product growth expected at around 7% in 2018, the IMF said. "Cambodia's economy continues to grow at around 7%, supported by higher public spending and robust construction and tourism activity," Jarkko Turunen, who led an IMF team to visit Cambodia from March 12 to 16, said, Xinhua reported.

"Cambodia's economic outlook remains positive, but is subject to downside risks. Macro-financial and external risks remain significant, and political uncertainties could dampen consumer and investor sentiment," he said. "On the upside, stronger global growth may increase foreign demand for goods exports and tourism."

Turunen said policies should focus on managing macro-financial risks, safeguarding fiscal sustainability and advancing reforms to support growth, resilience and inclusion.

He said bank credit growth has moderated somewhat to 17.2% in January 2018, but credit growth to real estate and construction related activities continues to grow at a higher pace than credit to other sectors. Turunen added that Cambodia's public external debt remained relatively low at $6.67 billion, about 30% of GDP, at end 2017.


Despite Nigeria’s exit from recession, its economic situation remains challenging and policy implementation needs to move quickly and comprehensively, if the country is to reap its long-term potential, the IMF said.

The IMF, which stated this in its latest report on Nigeria, noted that although growth in the country recovered to 0.8% in 2017 and high oil prices continue to support the recovery, “more needs to be done to reduce unemployment and address poverty.”

According to the fund, rising oil prices, new foreign exchange measures, attractive yields on government securities, and a tighter monetary policy have made foreign exchange more readily available and helped contain inflation, thereby making Nigeria more appealing to investors who are now returning to the country.

The IMF also pointed out that the policies initiated under the Federal Government’s Economic Recovery and Growth Plan had started to tackle some of the challenges facing the economy.


In light of their plans to visit India and Bhutan this week, Tao Zhang, the Deputy Managing Director of International Monetary Fund, and his officials released a few statements regarding the Indian economy.

IMF has said that the two historic reforms of demonetization and implementation of GST did cause temporary disruptions in the Indian economy, slowing it down. Our economy, especially small business and the private consumption sector—being a cash-dominated economy—was bound to be affected by the withdrawal of the two most frequently used denominations.

Further, GST as a concept can be regarded as a landmark reform in the economy without any doubt. It constructively contributed to the efficient movement of goods within the country, enhancing tax buoyancy, boosting GDP growth, and most importantly, creating a common national market. However, it was the implementation of this reform that contained the “complexities and glitches”.

Despite the above-mentioned restraints, IMF has also said that the economy is on the path to recovery which is evident from its expansion rate of 7.2% as registered in the month of October-December 2017-18.

Add new comment

Read our comment policy before posting your viewpoints