Washington, Nov.8 (ANI): The International Monetary Fund (IMF) has cut its forecast for China’’s economic growth in 2009 to 8.5 percent from 9.3 percent.
According to the China Daily, it also changed its estimate of developed countries” growth next year to a decline of 0.3 percent, from 0.5 percent growth.
The IMF now expects the global economy will grow 2.2 percent in 2009, 0.8 percentage point less than last month’’s estimate.
In the latest World Economic Outlook published in Washington DC on Thursday, ahead of the G20′’s Nov 15 meeting, the IMF urged countries to “stimulate their economies” in the face of a worse-than-expected global economic slowdown triggered by the US sub-prime mortgage crisis.
“Prospects for global growth have deteriorated over the past month, as financial sector de-leveraging has continued, and producer and consumer confidences have fallen,” the report said.
Output is forecast to contract in advanced economies in 2009, the first such fall since World War II, the report said. It also said emerging economies” growth is projected to “appreciably” slow to 5 percent in 2009, down from 6.6 percent a year before.
“Countries in East Asia, including China, generally have suffered smaller markdowns, because their financial situations are typically more robust. They have benefited from improved terms of trade from falling commodity prices, and they have already initiated a shift toward macroeconomic policy easing,” it said.
Since September, China has reversed its tightened monetary policy by cutting interest rates for a third consecutive time to ward off an economic slowdown amid the global financial crisis.
However, many analysts worried monetary policy may not be enough to invigorate the country’’s economy, as the export sector, a major driver of China’’s economic growth, is deteriorating because of weaker overseas demand.
The IMF has called for more macroeconomic policy stimuli to drive growth and create a context for the restoration of financial sector’’s healthiness. (ANI)