IMF Raises Russia's GDP Growth Forecast to 1.8% in 2019

Marco Green
October 11, 2018

"There are clouds on the horizon".

The IMF said a new data base in its semi-annual Fiscal Monitor report showed considerable net worth in 31 countries that account for 61 per cent of global economic output. "Not only have some downside risks we identified in the last WEO (World Economic Outlook) been realised, the likelihood of further negative shocks to our growth forecast has risen".

"Looking ahead, clouds appear on the horizon", the report, published at the body's annual meeting in Bali, Indonesia, says.

The US simultaneously threatened to add tariffs to a further $267 billion (£205 billion) of products, which saw China retaliate with 10 percent tariffs on $60 billion (£46 billion) of US imports.

If the trade war continues, it could take a significant bite out of global growth, according to the fund. "In Angola, inflation is projected to fall to 20.5 per cent in 2018 from 29.8 per cent in 2017, and to decline further to 15.8 per cent in 2019", it added.

The cut its 2019 USA 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.

IMF's forecasts for Hong Kong's economic outlook are mixed: it raises its forecast for 2018 by 0.2 percentage points to 3.8%, while cutting its forecast for 2019 by 0.3 percentage points to 2.9%.

Also on Tuesday, it projected that inflation in Nigeria would increase to 13.5 per cent next year.

In September, the US implemented another round of tariffs on $200 billion worth of Chinese goods, which were met with countermeasures out of Beijing on $60 billion worth of USA goods. The IMF projections don't take into account Mr Trump's threat to expand the tariffs to effectively all of the more than US$500 billion in goods the United States bought from China a year ago.

While the IMF's outlook for the Chinese economy stayed at 6.6% this year, its forecast for next year of 6.2% represents the slowest growth rate the Asian country has seen since 1990.

The Federal Reserve, the US central bank, has raised short-term USA rates three times this year as the American economy gains strength more than nine years after the end of the Great Recession. Britain's FTSE 100 dropped 0.4 per cent to 7,201.

Overall risks in emerging markets remain "moderate compared with historical levels", according to the International Monetary Fund. "Should market participants start pricing in the possibility of protracted trade tensions, financial conditions could tighten significantly, increasing the tail risk to global growth and financial stability", the International Monetary Fund said.

The country recorded an average 4.7 percent growth between 2000 and 2009.

These include instances where some key economies have supported their growth with policies that seem unsustainable over the longer term.

Broadly speaking, global financial conditions remain accommodative and supportive of near-term growth, albeit somewhat tighter than six months ago.

Other reports by Click Lancashire

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