Asian behemoths China and India will bear the weight of the world this year as they are the only sizeable economies projected to record over 5% growth rates in 2009 — which will at least help to offset global weakness and hopefully buoy up the world economy, according to the latest update released January 28 from the International Monetary Fund’s World Economic Outlook.
IMF kicked off the year with its grim forecast of a mere 0.5% growth for the world economy in 2009, a sharp downward revision from its prior projection of 2.2% growth in global output. The forecast for China’s economic growth in 2009 has been cut from 8.5% to 6.7%, while IMF now estimates the Indian economy will grow at 5.1% from 6.3% projected in November last year.
Chinese President Wen Jiabao reiterated at the Davos forum his confidence that China will achieve 8% growth in 2009, though this year will possibly be the toughest year since 2000. India officials too expressed optimism that the Indian economy will grow between 7-7.5% in 2009-10.
Advanced economies are forecast to record a 2% decline in output, the IMF projected. The UK will be hardest hit as its economy is expected to shrink by 2.8%, Japan by 2.6% and Germany by 2.5%. The Euro area as a whole will suffer a worse blow than the United States with a 2% drop in output this year, while the US economy is expected to decline 1.6% in 2009.
For the “Newly Industrialized Asian Economies” including Korea, Hong Kong, Singapore and Taiwan, the IMF’s projection was -3.9% growth this year. The figure is down 6% from the 2.1% economic growth predicted in November 2008. In 2010, the projected economic growth rate for Newly Industrialized Asian Economies is 3.1%, down 1.1% from the Nov. 2008 prediction of 4.2%. Expected economic growth rate for each individual country in the group was not released.
Global growth is expected to rebound to 3% in 2010, again led by the twin propellers of China and India with 8% and 6.5% projected growth respectively.
Source – International Monetary Fund, January 2009
