Brexit will be a drag on global growth through 2017: IMF – ElEspectador.com

The thick cloud of uncertainty generated by the historic decision by the UK to leave the European Union will act as a drag on growth of the world economy until 2017 , warned Tuesday the International Monetary Fund (IMF).

this scenario led to the financial institution relight the lights and alarm by 0.1 percentage point cut its forecast for global growth this year and next, with respect to the expectation that was announced in April.

in this update their expectation, the IMF expects the global growth this year will be 3.1%, which in 2017 would experience a slight expansion to 3.4%.

for the IMF, the victory of those who defend the break with the European Union clouded expectations for both the British economy and the euro area , and therefore revised marginally to low performance of a global economy already in the midst of a very fragile recovery.

This new relationship between the UK and the EU could represent the emergence of new economic barriers , with the consequent impact on financial markets, levels of consumer and investor confidence. (Read: The Brexit sinks index investor confidence in Germany)

For the IMF, this table may represent for the British economy a high price, of about 1 % of growth for 2017, in a box marked by a “significant weakening of domestic demand.”

“the continuity of the uncertainties should have a impact on consumption and especially investment, “ said the IMF.

However, the IMF noted the persistence of other risks, in addition Brexit for performance of the global economy.

Among those factors, he mentions dysfunctional loans and low profitability of banks in Greece, Italy and Portugal, and the continuing turmoil in financial markets.

it is said the IMF factors that “could have severe macroeconomic implications”.

for the entity, while prospects short term for the Chinese economy basically remain the same, heavy reliance on credit to boost growth could generate instability.

in the case of Latin America and the Caribbean, the IMF maintained its April forecast virtually unchanged , with a marginal upward revision of 0.1 point.

the region should close the year with a decline of -0, 4% , where in April had indicated an expectation of -0.5%. For 2017, the IMF forecasts growth of 1.5% (1.4% in April).

The big surprise of the region, according to the expectation . IMF is the status of Brazil, where the IMF revised up its forecast by half a percentage point

the South American giant will close the current year – 3.3% in 2017 to display a timid recovery of 0.5%.

Mexico meanwhile, should grow 2.5% this year (up 0.1 point compared to April) and 2.6% next year (unchanged).

Africa concerns focus on Nigeria, the largest economy on the continent, suffering with continued drop in oil prices low energy production and plummeting investor confidence.

IMF had predicted that the Nigerian economy should grow 2.3% but according to the review might instead retract 1.8%, as a result of the strong devaluation of their currency.