Contact Your Financial Adviser Money Making MC
9 May
2018
 |
| Indian Economy (The Total Investment & Insurance Solutions) |
The Indian
economy is expected to grow at 7.4 per cent in the current fiscal and
accelerate further to 7.8 per cent as it recovers from the impact of
demonetisation and GST roll out, IMF said today. The Total Investment & Insurance Solutions
Asia continues to be the main engine of the
world's economy, accounting for more than 60 per cent of global growth
three-quarters of which comes from China and India alone, as per IMF's Regional
Economic Outlook: Asia and Pacific (REO).
"But there are risks and challenges
ahead, including from a tightening of global financial conditions, a shift
toward inward-looking policies, and over the longer run population aging,
slowing productivity growth, and the rise of the digital economy," it
said.Asia is expected to grow at 5.6 per cent this year and next, it said, adding
that the outlook is supported by strong global demand, as well as still
accommodative policies and financial conditions.
"In
India, growth is forecast to rebound to 7.4 percent in FY 2018/19 as the
economy recovers from disruptions related to the currency exchange initiative
and the rollout of the new Goods and Services Tax," it said.
China, it said, is projected to grow at 6.6
per cent in the current year which will moderate to 6.4 per cent next year. The Total Investment & Insurance
Solutions
Noting that present rates of inflation in
Asia are some of the lowest in decades, it said, it has seen some upward
movement since September 2017 on the back of rising oil prices. The Total Investment & Insurance
Solutions
"But core inflation which excludes food
and energy remains low and below target in many economies. In 2017, headline
inflation on average was 0.6 percent lower than target in Asian advanced
economies, and 0.8 percent under target in Asian emerging market
economies," it said.
The latest report explores why inflation has
been so low. And it finds that first that temporary global factors, including
commodity prices and imported inflation, have been key drivers of low
inflation. But these factors could reverse, and inflation could rise. The Total Investment & Insurance
Solutions
According to the report, inflation has become
more backward-looking, meaning that past inflation drives current inflation
more than future expectations. This suggests that if inflation rises, it may
persist.
"Further, there is some evidence that
the sensitivity of inflation to economic slack has decreased (i.e., the
Phillips curve has flattened), suggesting that if inflation rises, there may be
a large hit to output when reducing it," it said.
All of these mean that central banks should
watch out closely for signs of inflation pressure now and stand ready to
respond.The Total Investment &
Insurance Solutions
No comments:
Post a Comment