Published: Wed, April 19, 2017
Research | By Jennifer Evans

IMF Lowers Egypt's 2017 Growth Forecast as Reform Costs Mount

IMF Lowers Egypt's 2017 Growth Forecast as Reform Costs Mount

The International Monetary Fund (IMF) on Tuesday confirmed a 3 pct growth forecast for Serbia for 2017, with 3.5 pct growth predicted for next year.

The IMF said in its latest World Economic Outlook that it now expects China' economy to grow 6.6 percent this year before slowing to 6.2 percent next year - up 0.4 percentage points for 2017 and 0.2 percentage points for 2018 compared to its October forecast.

US growth is expected to hit 2.3% in 2017, up from 1.6% in 2016.

Maurice Obstfeld, economic counsellor for the IMF, said: "Mainly in advanced economies, several factors-lower growth since the 2010-11 recovery from the global financial crisis, even slower growth of median incomes, and structural labour market disruptions-have generated political support for zero-sum policy approaches that could undermine worldwide trading relationships, along with multilateral cooperation more generally".

The previous document of this kind published by the International Monetary Fund in October 2016 predicted 2.8 percent GDP growth for Serbia in 2017.

"After contracting by 1.5 percent in 2016 because of disruptions in the oil sector coupled with foreign exchange, power, and fuel shortages, output in Nigeria is projected to grow by 0.8 percent in 2017 as a result of a recovery in oil production, continued growth in agriculture, and higher public investment".

Another regional black gold producer, Angola, which experienced zero growth in 2016, was expected to show improvement this year, thanks to the effects of economic diversification.

Forecast for advanced economies was marked up 0.1 percent in 2017 to 2 percent while the forecast for 2018 remains unchanged also at 2 percent.

"Protectionist policies in advanced economies would have an overall negative impact in Asia including the Philippines but the magnitude of impact and channels would depend on the specific policies that are still uncertain", he said.

The warnings follow events like the Brexit vote and the USA election of President Donald Trump, which have promoted more domestically-focused policies on business and trade. "On the other hand, the world economy still faces headwinds", Obstfeld said. Qatar will post 3.4 per cent growth in 2017 and 2.8 per cent in 2018.

Threats to global trade and integration, however, were given the most emphasis by Obstfeld.

The IMF pointed out that China's desirable rebalancing process continues, as seen in a declining current account surplus and an increased GDP share of services, but it said the growth has remained reliant on domestic credit growth so rapid that it may cause financial stability problems down the road.

Among the factors that could harm economic growth: a protectionist trade agenda, a faster-than-expected rate hike in the USA, and an aggressive rollback of financial regulations, according to the IMF's report.

The reference to the threats posed by protectionist choices in the United States is clear.

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