Martes, 26 Marcha, 2019

International Monetary Fund raises growth predictions, frets about protectionism

Manuel Armenta | 24 Abril, 2017, 19:02

The monetary fund's latest outlook for the global economy comes in advance of spring meetings in Washington this week of the IMF, the World Bank and the Group of 20 major economies. It, however, revised up its unemployment rate forecast for the country at 6.1 percent in 2018.

The IMF lifted Japan's 2017 growth projection by 0.4 percentage point from January, to 1.2 per cent, while the euro zone and China both saw a 0.1 percentage point growth forecast increase to 1.7 per cent and 6.6 per cent, respectively.

That figure is up from the previous estimate of 3.4 percent as the bank cited "buoyant financial markets and a long-awaited cyclical recovery in manufacturing and trade under way". International Monetary Fund has revised downwards the unemployment rate in Romania, which is estimated to reach 5.4% this year.

The Philippines which grew by 6.8 percent past year has the highest growth projections among ASEAN-5 nations, followed by Vietnam (6.5 percent for 2017), Indonesia (5.1 percent), Malaysia (4.5 percent) and Thailand (three percent).

The outlook comes in advance of spring meetings in Washington this week of the IMF, the World Bank and the Group of 20 major economies against the backdrop of a gradually strengthening worldwide picture, especially in many emerging economies, despite resistance to free trade and political unrest in some countries. This is better than the most recent forecast by the Australian Treasury and released by the Australian government in December a year ago, which predicted GDP would "pick up to 2?? per cent in 2017-18 as the detraction from mining investment eases". It had also trimmed the 2017-18 growth forecast for India by 0.4 percentage point to 7.2 per cent for the same reason.

China's economy grew by a faster-than-expected 6.9 percent in the first quarter of this year, fuelled by robust bank lending, higher government infrastructure spending and a housing market that is showing signs of overheating.

China's debt-to-GDP ratio rose to 277 percent at the end of 2016 from 254 percent the previous year, with an increasing share of new credit being used to pay debt servicing costs, according to an estimate from UBS.

"But structural impediments to a stronger recovery and a balance of risks that remain tilted to the downside, especially over the medium term, remain important challenges", it said.

The IMF warned too that emerging market and developing economies remained at risk from a more rapid rise in interest rates, a large appreciation in the US dollar and lower commodity prices.