International Monetary Fund raises 2017 global growth forecast to 3.5 pct

Melba UnderwoodApr 19, 2017

The International Monetary Fund lowered its 2017 growth forecast for Egypt, reflecting the economic toll from the government's decision a year ago to float the pound and introduce a reform program.

"Growth is projected to remain robust at 6.8 percent in 2017 and 6.9 percent in 2018, led by strong domestic demand and a recovery in exports", Shanaka Jayanath Peiris, IMF resident representative to the Philippines, told reporters by email on Tuesday after the release of the World Economic Outlook (WEO) Update report. The IMF's latest outlook for 2017 is a slight upgrade from the 3.4 per cent global growth it had forecast in January.

"At the same time, a combination of adverse weather conditions and civil unrest threaten several low-income countries with mass starvation.

Acceleration will be broad based across advanced, emerging, and low income economies, building on gains we have seen in both manufacturing and trade", Obstfeld said.

Inflation in Kazakhstan is projected to reach 8 percent in 2017 and 7.2 percent in 2018 compared to 14.6 percent in 2016. "This improvement comes primarily from good economic news for Europe and Asia, and within Asia, notably for China and Japan".

Although growth looks to be strengthening broadly among advanced and emerging market economies as well oil and commodity exporters that are starting to benefit from a commodity price recovery, including Russian Federation and Brazil, the International Monetary Fund said the recovery remains fragile.

The International Monetary Fund's most recent world economic outlook provides little analysis of Canada's performance but notes that it stands to benefit this year from improved commodity prices and a stronger outlook for the U.S. U.S. President Donald Trump has plans to soften rules for banks as he believes that the current regulation hinders lending to the real economy. These could in turn spill over to other countries. Qatar will post 3.4 per cent growth in 2017 and 2.8 per cent in 2018.

But the IMF, Germany and other nations are anxious that overly-aggressive actions by the USA could spark a tit-for-tat trade war that stalls global growth.

In countries in which growth is insufficient, monetary policy has to be accommodative (a reference to the European Central Bank) but it can not work on its own, the IMF says, underlining once again the need to clean up bank balance sheets, facing the issue of non-performing loans (NPLs), a problem that is particularly acute in Italy, and strengthening the efficiency of banks.

The U.S. says its policies or threats don't amount to protectionism, but rather are an effort to rebalance distorted trade relationships.

Numerous concerns - including rolling back financial regulation, pulling away from the multilateral trading system and restricting immigration - are centerpieces of US President Donald Trump's policy program, but also are issues visible in the bitter French election campaign, as well as in Britain's planned exit from the European Union.

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