New Delhi: The signs of revival in the global economy should not be confused with the financial crisis being over and the countries should be ready with policies to sustain the recovery, multilateral lending agency IMF has said.
“The current numbers should not fool governments into thinking that the crisis is over,” IMF chief economist Olivier Blanchard said while releasing the World Economic Outlook.
He also asked countries around the world to co-ordinate policies to achieve a global rebalancing and sustain the recovery.
Olivier’s remarks assume importance in the event of G-20 nations agreeing not to withdraw stimulus packages prematurely and coordinate actions among themselves in this regard.
IMF in its outlook for the global economy has said that global activity is now on the rise again. However, the world economic growth is expected to be in the negative zone of 1.1% in 2009, according to IMF. This is after, the Fund revised up its outlook on world economic growth by 0.3 percentage points for the current calendar year.
The global economic growth is expected to reach 3% by next year.
Further, the IMF pointed out that after a deep recession, global economic growth has turned positive, driven by wide-ranging, co-ordinated public intervention that has supported demand and reduced uncertainty.
However, the recovery is expected to be slow, as financial systems remain impaired and support from public policies will gradually have to be withdrawn.
The rebound, it added, is mainly driven mainly by emerging economies like China, India.
So far as Indian economy is concerned, IMF pegged India’s growth at 5.4% in 2009 while the economy could clock a growth rate of 6.4% in 2010.
Indian economy grew by 6.1% in the first quarter of this fiscal making hopes rife that the country could meet the target growth rate of 6% plus as projected by the government.
Industrial output also grew by 6.8% year-on-year in July, lower than the previous month’s upwardly revised 8.2% growth, but still high enough to trigger hopes of a sustained economic revival.