The economical status of the globe is a fluctuating phenomenon like weather changes in the course of time. How hard it would be to determine the futuristic standing of the same in close to a year.
Well, regardless of the indifferences and imbalance that shape the economy of nearly every country with its unique challenges, the International Monetary Fund (IMF) has stood firm its ground dictating and affirming that its growth forecasts for the world economy will remained unmoved for the rest of 2017 and 2018, citing at 3.5 per cent and 3.6 per cent in that order.
In an updated World Economic Outlook, the IMF said global gross domestic product growth would remain unchanged from estimates issued in April, although it revised up growth expectations for the eurozone and China.
The IMF lowered growth outlook for the Middle East and North Africa predicting slow pace over oil prices as the Saudi economy slides.
The executive board of the fund, which recently concluded the Article IV consultation with the UAE, said the second largest Arab economy’s financial buffers, safe-haven status, sound banks and diversified and business-friendly economy are helping it cope with the lower oil price shock.
The IMF said in its report that economic activity is expected to strengthen gradually in the coming years with firming oil prices and other global indicators and an easing pace of fiscal consolidation. Non-oil growth is projected to rise to 3.3 per cent in 2017 from 2.7 per cent in 2016, reflecting increased domestic public investment and a pick-up in global trade.
In the latest update, the IMF cut its forecasts for US growth to 2.1 per cent for 2017 and 2018, slightly down from projections of 2.3 per cent and 2.5 per cent, respectively, just three months ago.
Maurice Obstfeld, the IMF’s economic counsellor and director of research, said the global economy has been the subject of considerable protectionist rhetoric, such as President Donald Trump’s proposed tariff on steel imported from China, but such talk had yet to translate into much action.
“What will happen in the future, we don’t know. These threats are in our downside thinking. They’re not built into our baseline (forecast) because hopefully they don’t happen, but there are risks,” Obstfeld said.
“China’s growth is expected to remain at 6.7 per cent in 2017, the same level as in 2016, and to decline only modestly in 2018 to 6.4 per cent. The forecast for 2017 was revised up by 0.1 percentage point, reflecting the stronger than expected outturn in the first quarter of the year underpinned by previous policy easing and supply-side reforms,” it said.
Obstfeld expected China’s economic expansion to slow down over the second half of 2017 as Chinese authorities looked to manage rapid credit growth and non-performing loans.
Growth in India is forecast to pick up further in 2017 and 2018, in line with the April 2017 forecast. “While activity slowed following the currency exchange initiative, growth for 2016 — at 7.1 per cent — was higher than anticipated due to strong government spending and data revisions that show stronger momentum in the first part of the year.”