Phil Rosen
·2 min read
The IMF said China will be the largest driver of global economic growth in the next five years.
China will contribute 22.6% of total world growth, while the US will contribute 11.3%.
Half of global growth will be concentrated in China, the US, India, and Indonesia.
China will become the biggest driver of global growth over the next five years and will contribute double what the US adds, according to the International Monetary Fund.
Based on Bloomberg calculations from data in the IMF's World Economic Outlook released last week, China's slice of global gross domestic product expansion will be at 22.6%, India's will be 12.9%, and the US will add 11.3%.
They are followed by Indonesia, Germany, Turkey, and Japan, each with a less than 3.6% contribution.
Three-quarters of global growth will stem from 20 countries, and over 50% will come from just China, India, the US, and Indonesia.
The IMF expects growth contributions from Brazil, Russia, India, and China to outpace Group of Seven nations.
Overall, the IMF anticipates global growth to expand about 3% over the next five years in a higher-interest-rate environment. It's the weakest outlook in over 30 years.
The group's report highlighted that recent bank turmoil and sticky inflation have heightened recession risks. March brought the collapse of Silicon Valley Bank and Signature, in addition to trouble with Silvergate, Credit Suisse, and other names.
"Risks to the outlook are squarely to the downside," the IMF said. "Much uncertainty clouds the short- and medium-term outlook as the global economy adjusts to the shocks of 2020–22 and the recent financial sector turmoil. Recession concerns have gained prominence, while worries about stubbornly high inflation persist."
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As an expert in global economics and financial trends, I can provide valuable insights into the information presented in the article by Phil Rosen on April 18, 2023. The article discusses the International Monetary Fund's (IMF) assertion that China will be the primary driver of global economic growth in the next five years.
Firstly, the evidence supporting this claim is rooted in data from the IMF's World Economic Outlook, released the previous week. The calculations conducted by Bloomberg reveal that China is expected to contribute significantly to global gross domestic product (GDP) expansion, accounting for 22.6%. This substantial contribution surpasses that of the United States, which is projected to add 11.3% to global growth.
The article emphasizes that half of the global growth will be concentrated in four countries: China, the United States, India, and Indonesia. China, in particular, is expected to contribute double the growth of the United States over the specified period.
The distribution of growth contributions extends further to include India with a 12.9% share, and other countries such as Indonesia, Germany, Turkey, and Japan, each contributing less than 3.6%. The article highlights that three-quarters of global growth will originate from 20 countries, with more than 50% coming from China, India, the United States, and Indonesia.
Importantly, the IMF anticipates that the growth contributions from Brazil, Russia, India, and China (BRIC nations) will outpace those of the Group of Seven (G7) nations, underscoring the shifting dynamics in the global economic landscape.
The overall global growth outlook, as projected by the IMF, is relatively modest at around 3% over the next five years. This forecast is contextualized within a higher-interest-rate environment, marking the weakest outlook in over 30 years. The report from the IMF raises concerns about recession risks, citing recent bank turmoil and persistent inflation as contributing factors.
In conclusion, the information presented in the article underscores China's pivotal role in global economic growth, as recognized by the IMF. The data-driven analysis provides a comprehensive overview of the expected contributions from key countries, shedding light on the current challenges and uncertainties in the global economic landscape.
