IMF Cuts Global Growth Forecast


Monday, October 21, 2019   /11:47AM  / By CSL Research / Header Image Credit:  Daily Sabah

At the recently concluded IMF/World Bank meeting in Washington DC, IMF trimmed its growth forecast for the global economy to 3.0% (from the earlier forecast of 3.3% in April), the slowest pace since the global financial crisis over a decade ago. Although, IMF projected a modest improvement in global growth to 3.4% in 2020, it noted that the recovery is not broad-based, hence it remains precarious. According to the Fund, the global economy is in a synchronized slowdown and growth continues to be weakened by rising trade barriers and increasing geopolitical tensions. IMF estimates that the lingering US-China trade tensions will cumulatively reduce the rate of global GDP growth by 0.8% by 2020.

Asides trade disputes between U.S and China, IMF highlighted that growth is also being weighed down by country-specific factors in several emerging market economies, and by structural forces, such as low productivity and aging demographics in advanced economies. Growth in emerging market and developing economies was revised down to 3.9% for 2019 (compared to 4.5% recorded in 2018) owing in part to trade and domestic policy uncertainties, amidst a structural slowdown in China.

In view of elevated trade and geopolitical tensions, including Brexit-related risks, which could further disrupt economic activities, and derail an already fragile recovery in emerging market economies, IMF called on policymakers to undo the trade barriers put in place with durable agreements, rein in geopolitical tensions, and reduce domestic policy uncertainty. In ameliorating the risks to growth and boosting potential output, the Fund also cited the need for fiscal authorities to step up their efforts in complementing the efforts of the monetary authorities as monetary policy cannot be the only game in town.

Furthermore, countries were urged to undertake structural reforms to boost productivity, improve resilience, and lower inequality. The warnings and recommendations of IMF should be a wake up call for the Nigerian government to implement structural reforms that will eliminate obstacles to the efficient production of goods and services, enhance productivity and stimulate private sector investment.

 Proshare Nigeria Pvt. Ltd.

Proshare Nigeria Pvt. Ltd.

Related Links 

SUB-SAHARAN AFRICA: Sub-Saharan Africa Regional Economic Outlook: Navigating Uncertainty as at October 2019

1.      Full Text Country Focus 

2.     Background Paper and Expanded  and Statistical Appendix Tables

Download the PDF here:

1.      World Bank SSA Outlook - Executive Summary - Oct 2019

2.     World Bank IMF Regional Economic Outlook - Oct 2019

Proshare Nigeria Pvt. Ltd.

Related News

  1. Lower for Longer: Rising Vulnerabilities May Put Growth at Risk
  2. The World Economy: Synchronized Slowdown, Precarious Outlook
  3. Global Banks May Grow More Vulnerable to a Dollar Disruption
  4. IMF Staff Concludes 2019 Visit to Nigeria
  5. AFREXIM Bank President Advocates for Vehicles That Facilitate Cross-Border Trade
  6. AfDB Sustainable Energy Fund for Africa Approves $500,000 Grant for Clean Energy
  7. The Economics of Data
  8. New Index Tracks Trade Uncertainty Across the Globe
  9. AfDB To Present Africa 2019 Report On September 12th, 2019
  10. Inclusive Growth Amid Technological Change Drives World Economic Forum
  11. A Role For Financial And Monetary Policies In Climate Change Mitigation
  12. 28th World Economic Forum On Africa To Focus On Inclusive Growth In The Fourth Industrial Revolution
  13. Monitoring Global Financial Stability


Proshare Nigeria Pvt. Ltd.

Proshare Nigeria Pvt. Ltd.

Related News