The International Monetary Fund (IMF) has expressed need for developing countries like India to enhance public and private investments to fill infrastructure gaps. Highlighting that higher and well-prioritised investment would increase potential output and jobs, IMF chief Christine Lagarde has asserted that over the years, investment has declined across many countries such as Brazil, India, South Africa, and the ASEAN countries. The IMF had already noted that the recent investment gloom in India was mainly due to deteriorating business confidence, high financing costs and heightened uncertainty regarding the future course of broader economic policies.
On global economy, the IMF chief emphasized that investment to upgrade existing infrastructure networks is also needed in a number of the advanced economies like the US and Germany. Global economy has certainly stabilized since the onset of the financial crisis, but the recovery was too weak for comfort. The global economy is witnessing slow and sub-par growth, well below the solid, sustainable growth, therefore it has become imperative for countries come together to take the right kind of policy measures to boost economy’s growth is needed to create enough jobs and improve living standards into the future. Right policy actions and better cooperation across countries could raise world GDP by over 2 percent over the next 5 years, she added. The global activity has moderated at slow growth in developed economies, the emerging market and developing economies have been bearing the burden of recovery, accounting for around 75 percent of the increase in global growth since 2009.
Referring to economic growth in various countries, growth is strongest in the United States, supported by robust private demand and an easing of the short-term fiscal brake. While, activity in emerging market economies, which has been slowing, picked up slightly in the latter part of 2013 by stronger demand from advanced economies. Further she added that emerging Asian countries will continue to be a bright spot, posting the world's highest growth rate of more than 6 percent in 2014, though tighter external financial conditions would be a drag on domestic demand.
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