International Monetary Fund sharply cuts Mideast oil exporters' economic growth forecasts

Italy is not latching on to the recovery that is strengthening in the rest of the global economy and in particular in other developed countries, and its growth rates remain below those of the major industrial nations, according to new forecasts from the International Monetary Fund (IMF).

The world financial body in a release yesterday by its Economic Counsellor and Director of the Research Department, Maurice Obstfeld, said the momentum in the global economy has been building since the middle of last year, "allowing us to reaffirm our earlier forecasts of higher global growth this year and next".

The report also stated that in sub-Saharan Africa; "Growth is projected to rise to 2.6 percent in 2017 and 3.5 percent in 2018, largely driven by specific factors in the largest economies, which faced challenging macroeconomic conditions in 2016".

However, Obstfeld noted, a number of countries will continue to struggle as a result of low commodity prices, extreme weather or unrest.

The IMF estimated emerging markets and developing economies will grow by 4.5 percent in 2017 and 4.8 percent in 2018, the same forecast as that of January. The projection for next year was left unchanged at 3.6%.

But it upgraded China's growth forecast in 2017 and 2018 to 6.6 and 6.2 percent, respectively.

The IMF has admitted that Britain's economy has been stronger than it had expected since last year's vote to leave the European Union and said the challenge now is for the United Kingdom is to successfully navigate that exit and trade deals.

"Protectionist policies in advanced economies would have an overall negative impact in Asia including the Philippines but the magnitude of impact and channels would depend on the specific policies that are still uncertain", he said.

"Whether the current momentum will be sustained remains a question mark", Obstfeld said.

'Though highly uncertain, medium-term growth prospects have also diminished in the aftermath of the Brexit vote because of the expected increase in barriers to trade and migration, as well as a potential downsizing of the financial services sector amid possible barriers to cross-border financial activity, ' the International Monetary Fund added.

The IMF said stronger growth is being fueled by a "long-awaited" recovery in investment, manufacturing and trade.

"I will meet the Emir and other Qatari government and business officials as we seek to strengthen our countries' business and trade relations", Museveni said before flying out on Tuesday.

"Public spending is expected to rise as the fiscal deficit target has been increased to 3 percent of GDP in 2017 and provide a stimulus to economic activity", he added.

Among the factors that could harm economic growth: a protectionist trade agenda, a faster-than-expected rate hike in the US, and an aggressive rollback of financial regulations, according to the IMF's report.

Threats to global trade and integration, however, were given the most emphasis by Obstfeld.

  • Tracy Ferguson