A trimming of the IMF's global output forecasts


Wednesday, October 07, 2015 08:39AM / FBN Capital Research   

The IMF’s latest World Economic Outlook (WEO), released for the annual meetings of the Fund and the Bank, is entitled Uncertainty, Complex Forces Weigh upon Global Growth.


Since its report in July, it has trimmed its forecast for world output growth in 2015 from 3.3% to 3.1%, and 2016’s from 3.8% to 3.6%.


The principal losers for 2015 are Japan (to 0.6% from 0.8%), Brazil (to a contraction of -3.0% from -1.5%) and Russia (to -3.8% from -3.4%).


The forecast for the US is raised marginally to 2.6% from 2.5%. India continues to enjoy the highest forecast growth both this year and next.


The projections for China for both years are unchanged for the second successive quarter.


It would presumably argue that it was ahead of the curve in challenging the official forecast out of Beijing of 7.0% for 2015.


The risks to its outlook remain tilted to the downside, notably a “hard landing in China”. 

The audience for the Fund’s message that oil exporters without fiscal space have to cut public spending clearly includes the new administration in Nigeria.

The Fund’s call for a structural reform agenda centred on steps to enhance employment and on labour market adjustment will be familiar to the FGN.

The WEO forecast for Nigerian growth for 2015 has been trimmed from 4.5% to 4.0%, and that for 2016 from 5.0% to 4.3%.

The Fund has cut its price assumptions, based on the futures markets, for its basket of three crude blends (including UK Brent) to averages of US$51.6/b in 2015 and US$50.4/b in 2016.

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