Thursday, 18 October, 2018

Nigeria to witness sluggish economic growth in 2019

Nellie Chapman | 10 October, 2018, 19:46

In 2017, India had clocked a 6.7% growth rate.

The IMF also cut its outlook for China as a result of the tariffs, shaving its projection for growth next year to 6.2 per cent, down 0.2 point from three months ago. The fund downgraded its forecast for USA growth next year to 2.5 per cent, down 0.2 percentage point from July, after factoring in the impact of tariffs imposed by the Trump administration and retaliatory duties by other nations.

It said that a full-blown trade war between the United States and China would put a significant dent in economic recovery. In April, the International Monetary Fund was forecasting 2.9 per cent for Australia next year.

"Notwithstanding the present demand momentum, we have downgraded our 2019 U.S. growth forecast owing to the recently enacted tariffs on a wide range of imports from China and China's retaliation".

Based on the trade tariffs already in place, the organisation revised down its estimates of world growth this year and next by 0.2 of a percentage point to a still healthy 3.7 per cent.

The IMF announced it had reduced its outlook on the global economy to a 3.7% growth rate for this year and next, down 0.2% from what it had originally predicted in July.

According to experts, such rise in the United States dollar rate against Pakistani rupee is an impact of government's decision to approach the International Monetary Fund (IMF) in order to handle the financial crisis that Pakistan is facing.

India's medium-term growth prospects remain strong at 7.75 per cent, benefiting from ongoing structural reform.

Pakistan's central bank issued a statement on October 9 saying the plunge in the rupee was due in part to rising oil prices, which have hiked the cost of imported oil and thus are putting pressure on Pakistan's large trade deficit.

According to the World Economic Outlook, in India, reform priorities include reviving bank credit and enhancing the efficiency of credit provision by accelerating the cleanup of bank and corporate balance sheets and improving the governance of public sector banks.

The cut its 2019 U.S. growth forecast to 2.5 percent from 2.7 percent previously, while it reduced China's 2019 growth forecast to 6.2 percent from 6.4 percent.

The IMF said a high interest burden and risks from rising yields in India also require continued focus on debt reduction to establish policy credibility and build buffers.

As part of its new Global Financial Stability Report, the International Monetary Fund said on Wednesday that financial institutions to "step up their preparations for a post-Brexit landscape" and prepare for the worst case scenario - a no-deal Brexit, also known as a hard Brexit.

The financial market volatility will likely continue next year, because the US Federal Reserve, after raising the federal funds rate by 25 basis points in its September 26 meeting, nonetheless signaled another rate hike by the end of this year and maintained its projection for three rate hikes in 2019. "Any sharp reversal for emerging markets would pose a significant threat to advanced economies", said Obstfeld.