The International Monetary Fund (IMF) maintained its forecast of global economic growth of 3.4% and 3.6% for 2017 and 2018, respectively, but warned of uncertainties.
“After the results lacklustre in 2016, it is projected that economic activity will improve in 2017 and 2018, especially in the emerging markets and in developing economies,” noted the IMF in its update of World Economic outlook, released today.
The IMF estimates the global economy grew by 3.1% in 2016, the level weakest since 2008-2009, due to a first half challenging, marked initially by the turmoil in the global financial markets.
The projections for 2017 and 2018 remain unchanged in relation to its forecast of October 2016. According to the IMF, this forecast incorporated a consolidation of oil prices and the anticipation of a political environment changing under a new administration in the united States and its global effects.
“a Big part of the better growth performance that we expect this year and next comes from improvements in some major emerging markets and economies of low-income in 2016 were exceptionally stressed,” said today the chief economist of the IMF, and Maurice Obstfeld, during a press conference.
The IMF projected that emerging markets and developing economies will grow 4.5% in 2017 and 4.8% in 2018, more than 4.1% in 2016.
The fund revised upwards the growth forecast in China to 2017 6.5%, in comparison with the projection of 6.2% made in October last. The IMF said the revision was based on expectations of political support continued for the economy.
The IMF kept unchanged its forecast of growth of China during 2018 at 6%, and said that China still needs to address the risks of the medium-term, as the rapid expansion of credit, and corporate debt.
The institution was modified to lower its forecast for India’s growth to 7.2% for 2017, due to the impact of negative consumption temporary, caused by cash shortages and interruptions of payment associated with the retirement recently of notes and of the exchange initiative.
The advanced economies could grow by 1.9% in 2017 and 2% in 2018, 0.1 and 0.2 percentage points more, respectively, than the forecast of October, said the IMF.
The fund provides a fiscal stimulus that will lead to growth in the united States to 2.3% in 2017 and 2.5% in 2018, respectively 0.1 and 0.4 percentage points more compared to its forecast in October.
The recent political developments underscore a possible change to policy platforms closed and protectionism, a hardening higher than expected in the financial conditions at the global level which could interact with the weakness of the financial balance in parts of the euro area and in some emerging market economies.
The IMF stated that the global activity may pick up more strongly if the stimulus politician turns out to be higher than projected currently in the united States or in China.
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