Economists call for cautious optimism about global economy at Davos

Economists including Christine Lagarde, Managing Director of International Monetary Fund (IMF), called Saturday for cautious optimism about global economy throughout 2016 and beyond.

"We see global growth in 2016 as modest and uneven," Lagarde said at a panel meeting of the World Economic Forum Annual Meeting, adding "there is modest optimism but significant risks."

In an update to its World Economic Outlook released on Tuesday, the Washington-based body said growth was put at 3.4 percent this year and 3.6 percent in 2017.

The global economy was presenting a "completely different picture that is changing", yet with downside risks including the lower-trending commodity prices as a result of oil prices and asynchronous monetary policies, she added at the meeting under the theme of the global economic outlook.

Meanwhile, consensus was reached by panelists that the markets had "overreacted" to China. The transition of the Chinese economy, moving from industry to services, from exports to the domestic market, as well as from investment to consumption was a massive undertaking, said the head of IMF.

"The basic lesson is not to be worried about markets; we have some big issues, "commented Martin Wolf, Associate Editor and Chief Economics Commentator at Financial Times, but the United States, Europe and China look okay and they were the core of the world economic system.

On the asynchronous monetary policy decisions taken by central banks around the word, Governor of the Bank of Japan Haruhiko Kuroda pointed out, monetary policy divergence among major economies simply reflected divergent financial situations.

The inflation rate of Japan remained low, but the economy had been making a moderate recovery, he said, "we will expect this growth to continue for some time and inflation could improve substantially once oil prices start to bottom out." Endite