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China will become the global economy’s biggest growth driver in the next 5 years, doubling the US contribution, IMF says

xi jinping chinaChinese President Xi Jinping.

Jason Lee/Reuters

  • 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.”

Read the original article on Business Insider