Chinese economy's reorientation will provide a more sustainable model with 6% growth – IMF

Almaty. September 30. Silkroadnews – Chinese economy's reorientation will provide a more sustainable model with 6% growth, Managing director of the International Monetary Fund Christine Lagarde believes.

«For the past several years, the global recovery has been weak and fragile, and this continues to be the case today. Especially for advanced economies – while there are some good signs – the overall growth outlook still remains subdued”, the IMF site quoted C. Lagarde saying.

In her view, the prospects for emerging market economies and developing countries deserve «some cautious optimism». Having played a leading role in the rise of the global economy after the 2008 financial crisis, as she noted, these countries will further contribute to more than three quarters of total global growth in 2016 and next year.

«China reorients its economy on a reasonable basis – from industry to services, from investments to consumption and from exports to domestic services – which should provide a more sustainable economic model, though, perhaps, with a less rapid growth. Even under such conditions, it will continue to grow rapidly at around 6% level», she said.

According to the data C. Lagarde referred to, the economy of India, which also starts launching significant reforms, is to expect the strong growth as well – at over 7% level. Russia and Brazil also show some signs of improvement after a period of severe contractions in their economies.

«The commodity exporting countries have suffered damage due to low commodity prices, countries in the Middle East continues to suffer from conflicts and terrorism. Many low-income countries in sub-Saharan Africa, which have been successfully developing for the last decade, also run into problems due to lower commodity prices», she said.

Thus, taking into account all the factors, both positive and negative, «we still face the problem of «too low global growth for too long a period of time for the too small number of people», C. Lagarde has noted.

«And even with this relatively moderate economic recovery there is still a considerable uncertainty observed. The divergent path of monetary policy in the major economies could provide the impetus to renew volatility in financial markets. Low productivity growth and high debt levels could further reduce investments and lower expectations for future growth. Undoubtedly, geopolitical events, such as terrorism and the related refugees inflows, pose risks that are hard to quantify, not to mention the measures to reduce them», IMF managing director noted.