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

Lloyd Doyle
October 10, 2018

The IMF notes that credit conditions in emerging markets have tightened since mid-April, driven by a stronger USA dollar, escalating trade tensions, and political and policy risks unique to individual countries.

Risks to the global outlook have risen in the last three months and tilt to the downside, the International Monetary Fund said.

Infrastructure needs: Pakistan needs more infrastructure development, Obstfeld added, and the country could benefit from China's role in supporting its project financing.

Specifically on the African continent, Mr. Obstfeld said that growth was been held down by Africa's three largest economies of Nigeria, South Africa and Angola.

The IMF said its forecast for investment growth for FY19 is weaker than in April, despite higher capital spending in India, on account of contracting investment in economies under stress, such as Argentina and Turkey, which is also reflected in a downward revision for import growth.

This was made known by the Director of the Research Department at the IMF, Gian Maurice Obstfeld, who spoke during the unveiling of IMF's World Economic Outlook (WEO), at the ongoing annual meeting of the International Monetary Fund and World Bank Group in Bali, Indonesia. But growth could weaken significantly further if additional trade protectionist measures are put in place, it said.

Brazil will see a 0.4 percentage-point drop in GDP growth to 1.4% for 2018 as a nationwide truckers strike paralysed much of the economy.

Japan's benchmark Nikkei 225 fell 1.3 per cent to 23,469.39.


The IMF notes that the market impact of escalating trade disputes has been limited to specific sectors.

The worldwide finance agency dropped its projection for world economic growth by two-tenths of a percentage point for both 2018 and 2019 to 3.7 percent, the first time it had trimmed its economic outlook in more than two years.

The Washington-based institution had predicted a 2019 growth rate of 1.5 percent for Russian Federation in its last update in July.

Trump has levied or threatened tariffs on goods from economies around the world, notably China, but also on traditional allies such as the European Union. "While Nigeria will grow from 1.9 per cent in 2018 to 2.3 percent in 2019, South Africa and Angola are projected to move from 0.8 to 1.4 and -0.1 to 3.1 per cents respectively". The May federal budget forecast 3 per cent GDP in 2018-19 and the same the following financial year.

On monetary policy, the IMF said it should be tightened to anchor expectations where inflation is expected to pick up, say in India.

"Growth performance varies, however, across countries".

"Owing to these changes, our worldwide growth projections for both this year and next are downgraded to 3.7 per cent, 0.2 percentage point below our last assessments and the same rate achieved in 2017", the report said.

The IMF said there was a "risk of contagion" as investors became increasingly nervous about the strength of emerging markets, with the risk of capital flows towards the U.S. accelerating.

Other reports by Iphone Fresh

Discuss This Article

FOLLOW OUR NEWSPAPER