Post Views: 714 The International Monetary Fund (IMF), on Monday published update of its World Economic Outlook, showing that an accumulation of recen...
The International Monetary Fund (IMF), on Monday published update of its World Economic Outlook, showing that an accumulation of recent data suggests that the global economic landscape would experience greater growth momentum this year, saying its earlier projection that world growth will pick up from last year’s lackluster pace in 2017 and 2018, looks increasingly likely to be realized.
From an estimated 3.1% last year, growth in world output is projected to grow first to 3.4% and then 3.6% in 2017 and 2018 respectively, boosted by the 4.5% and 4.8% growth in the emerging markets and developing economies for both years; as well as emerging and developing Asia such as India and China.
Sub-Saharan Africa’s output is expected rise to 2.8% in this year from 1.6% in 2016, before soaring by 3.7% in 2018; with Nigeria’s output coming out of a negative 1.5% growth last year to a weak 0.8% recovery, before soaring by almost three times to 2.3% next year.
While low-income developing countries are projected to grow from 3.7% in 2016 to 4.7% and 5.4% in 2017 and 2018 respectively in the January IMF World Economic Outlook update for 2017; South Africa is expected to grow at a less significant pace than Nigeria’s, coming from an estimated 0.3% rise last year to 0.8% this year, while only managing to double its growth next year.
According to the IMF, “compared to our view in October, we now think that more of the lift will come from better prospects in the United States, China, Europe, and Japan.
“A faster pace of expansion would be especially welcome this year: global growth in 2016 was the weakest since 2008–09, owing to a challenging first half marked initially by turmoil in world financial markets. General improvement got under way around mid-year. For example, broad indicators of manufacturing activity in emerging and advanced economies have been in expansionary territory and rising since early summer. In many countries, previous downward pressures on headline inflation weakened, in part owing to firming commodity prices,” it added.
A significant repricing of assets that followed the emergence of Donald Trump as U.S. president in last year’s election, the statement added, resulted notably in “a sharp increase in U.S. longer-term interest rates, equity market appreciation and higher long-term inflation expectations in advanced economies, and sharp movements in opposite directions of the dollar—up—and the yen—down. At the same time, emerging market equity markets broadly retreated as currencies weakened.
“In light of the U.S. economy’s momentum coming into 2017, and the likely shift in policy mix, we have moderately raised our two-year projections for U.S. growth. At this early stage, however, the specifics of future fiscal legislation remain unclear, as do the degree of net increase in government spending and the resulting impacts on aggregate demand, potential output, the Federal deficit, and the dollar.”