Reviews & Outlooks | |
Reviews & Outlooks | |
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Wednesday,
October 11, 2017 / 8:58 AM /FBNQuest Research
The IMF’s new World Economic Outlook (WEO) has
raised its global growth forecasts for this year and 2018 marginally from three
months ago to 3.6% and 3.7%. Among the country contributions, the forecasts for
the US have been lifted from 2.1% in both years to 2.2% and 2.3%. We note the
assumption that official policies will be unchanged (ie there will be no fiscal
stimulus).
Elsewhere, compared with July, the latest
outlook has stronger growth both years in the Eurozone, Japan, Brazil, Russia
and China. India still has the fastest growth next year, at 7.4%.
Short-term risks are seen as broadly balanced,
medium term tilted to the downside.
The latter are: a sizeable tightening in global
financial conditions; financial turmoil in emerging economies, notably China;
persistently low inflation in developed economies; a reversal of financial
regulation; protectionism; and non-economic and geopolitical factors.
The price assumptions, based on the futures
markets, for the Fund’s basket of three crude blends (including UK Brent) are
now an increase of 17.4% this year to US$50.3/b and a small decline for 2018 to
US$50.2/b.
The outlook’s forecasts for growth in Nigeria this
year and next are again unchanged at 0.8% and 1.9%. In what amounts to a
commentary on the FGN’s policymaking, projections in the WEO show GDP growth
per caput on a PPP basis negative through to 2022.
Trends in world output growth (% chg y/y) |
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Sources: IMF, World Economic
Outlook, October 2017; FBNQuest Research |
Nigeria is expected to emerge from recession
this year due to a recovery in oil output and some positives in agriculture.
Predictably, the Fund continues to view the CBN’s multiple currency practices,
which it terms market segmentation in the fx market, as a barrier to broader
recovery.
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