IMF releases World Economic Outlook; Sees subdued Global Growth
IMF urged India to continue reform of its tax system and eliminate subsidies to provide more resources for investments in infrastructure, education, and health care.
The International Monetary Fund on 4 October 2016 released World Economic Outlook (WEO) October 2016. The report projects global growth at 3.1 per cent in 2016, with slight increase to 3.4 percent in 2017.
It says that the persistent stagnation, particularly in advanced economies, could further fuel anti-trade sentiment, stifling growth.
Growth in emerging Asia, and especially India, continues to be resilient. India’s gross domestic product is projected to expand 7.6 percent in 2016 and 2017, the fastest pace among the world’s major economies. The IMF urged India to continue reform of its tax system and eliminate subsidies to provide more resources for investments in infrastructure, education, and health care.
It reports that the advanced economies will expand just 1.6 percent in 2016, less than 2.1 percent pace of 2015. The forecast is .2 percent below the July forecast which was 1.8 percent.
• The United States: IMF marked down its forecast for 2016 to 1.6 percent from 2.2 percent forecasted in July. It says that US growth is likely to pick up to 2.2 percent in 2017.
• The United Kingdom: Following the Brexit referendum of June, IMF forecasted that UK growth will slow to 1.8 percent in 2016 and to 1.1 percent in 2017.
• European Union: The euro area will expand 1.7 percent in 2016 and 1.5 percent in 2017, compared with 2 percent growth in 2015.
• Japan: It said that the world’s number three economy is expected to remain subdued at 0.5 percent in 2016 and 0.6 percent in 2017.
In emerging market and developing economies, growth will accelerate for the first time in six years, to 4.2 percent, slightly higher than the July forecast of 4.1 percent. In 2017, emerging economies are expected to grow 4.6 percent.
China: China’s economy, the world’s second largest, is forecast to expand 6.6 percent in 2016 and 6.2 percent in 2017, down from growth of 6.9 percent last year.
Sub-Saharan Africa’s largest economies continue to struggle with lower commodity revenues, weighing on growth in the region.
Nigeria’s economy will shrink to 1.7 percent in 2016, and South Africa’s will barely expand. By contrast, several of the region’s non-commodity exporters, including Côte d’Ivoire, Ethiopia, Kenya, and Senegal, are expected to continue to grow at a robust pace of more than 5 percent this year.
Economic activity in the region slowed, as several countries are mired in recession, with recovery expected to take hold in 2017. Venezuela’s output is forecast to plunge 10 percent in 2016 and shrink another 4.5 percent in 2017. Brazil will see a contraction of 3.3 percent in 2016, but is expected to grow at 0.5 percent in 2017, on the assumption of declining political and policy uncertainty and the waning effects of past economic shocks.
Countries in the Middle East are confronting challenging conditions from subdued oil prices, as well as civil conflict and terrorism.
Now get latest Current Affairs on mobile, Download # 1 Current Affairs App