The International Monetary Fund (IMF) has lowered its global growth forecast for 2016 to 3.4% and 3.6% in 2017, a cut of 0.2 percentage point for both the years from the October 2015 estimate.

In its latest report released on 19 January, the IMF said that the recovery will be modest in advanced economies while emerging economies will have to adjust to "new reality of slower growth."

The growth for the current year is, however, a tad higher from 3.1% in 2015.

The growth estimates for India and China remain unchanged at 7.5% and 6.3%, respectively, for the current year, while the gap is expected to narrow in 2017 when India's growth rate will be 7.5% as compared to 6% of China, the IMF said in its latest World Economic Outlook (WEO) update.

"This coming year is going to be a year of great challenges and policymakers should be thinking about short-term resilience and the ways they can bolster it, but also about the longer-term growth prospects," said Maurice Obstfeld, IMF Economic Counsellor and Director of Research.

While growth is advanced economies is forecast to inch up to 2.1% in the current year and 2017 as well, emerging economies are expected to grow at 4.3% and 4.7% in 2016 and 2017, respectively, after a low of 4% in 2015, the lowest since 2008-09.

But the growth in emerging economies is not uniform, the IMF said, adding India and parts of emerging Asia are bright spots, but Latin America and the Caribbean will see their economies shrinking in 2016.

Flagging off risks to its latest outlook, the IMF said growth in emerging economies is likely to be impacted further if China slows down further, commodity prices decline and the US Fed increases interest rates, strengthening the US dollar.

Besides, the geopolitical turmoil in various parts of the world could hurt global trade, tourism and financial flows, the IMF report added.

On the upside, the fall in global crude oil prices is expected to boost consumption in countries that are net oil importers.

The World Bank had projected the global economy to grow at 2.9% in 2016, up from  2.4% last year, in its January 2016 Global Economic Prospects released on 7 January, 2016.

Both the institutions had referred to India and the South Asian region as "bright spots" in a world that is witnessing prolonged weakness in economic growth.

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