Increasing Taxes Could Brake Inequality, According to IMF

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Those banks, named by the IMF in its biannual Global Financial Stability Report, are Citigroup, Barclays, Deutsche Bank, Société Générale, UniCredit Group, Standard Chartered, Sumitomo Mitsui Financial Group, Mizuho Financial Group, and Mitsubishi UFJ Financial Group are all expected to deliver subpar profits.

The IMF however downgraded its growth projection for the sub-Saharan Africa economy to 2.6 per cent for 2017 and 3.4 per cent for 2018, from 2.7 per cent and 3.5 per cent respectively projected in July.

"The downward revision relative to April forecasts reflects a major correction in U.S. fiscal policy assumptions", the IMF wrote in its latest World Economic Outlook report. The Asian Development Bank has cut India's growth forecast to 7% and the Organization for Economic Cooperation and Development estimates that India's economy will grow 6.7% in 2017.

"...there are going to be different complaints - some legitimate, some manufactured", the Minister said, adding that the government needs to have capacity to distinguish between a genuine and a manufactured complaint.

"For 2017, most of our upgrade owes to brighter prospects for the advanced economies, whereas for 2018's positive revision, emerging market and developing economies play a relatively bigger role".

The Fund acknowledges an inequality-dampening tax code "could be difficult to implement politically, because better-off individuals tend to have more political influence, for example, through lobbying, access to media, and greater political engagement".

China is expected to regain the fastest growing nation crown with 6.8 percent expansion this year, slightly ahead of India's 6.7 growth.

The U.S. economy will still expand, the IMF predicts, just not as quickly as some had hoped.

The analysis suggests that tax and spending policies do make a substantial difference. "Tax systems may be even less progressive than suggested by these measures because wealthy individuals often have more access to tax relief and more opportunities to avoid taxes".

Some degree of inequality is inevitable in a market economy, the report acknowledges, as result of differences in talent, effort and luck. "In India, growth momentum slowed, reflecting the lingering impact of the authorities' currency exchange initiative as well as uncertainty related to the midyear introduction of the country-wide Goods and Services Tax", the report said.

"The slowdown is driven by softer growth in private consumption as the pound's depreciation weighed on household real income", it said.

The IMF said Israeli consumer prices would climb 0.2% this year after falling 0.5% in 2016.