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18/04/2017 - 20:13hs

IMF forecasts pickup in world economy

The International Monetary Fund expects 3.5% growth in 2017 and 3.6% in 2018, up from 3.1% in 2016. Brazil is seen finding its way out of recession, and growth in the Middle East should lose steam.

São Paulo – The world’s Gross Domestic Product (GDP) is expected to pick up from 3.1% in 2016 to 3.5% in 2017 and 3.6% in 2018, according to the World Economic Outlook report released this Tuesday (18) by the International Monetary Fund (IMF). The IMF revised its forecast for this year by 0.1 percentage point from the last prediction, issued in January.

According to the Fund, the financial market is buoyant and a “long-awaited” recovery in manufacturing and trade, with world growth projected to increase this year and the next. Still, the IMF warns of the risk posed by protectionist measures from developed countries. United States president Donald Trump is a champion of such measures.

In emerging and developing countries, macroeconomic conditions are expected to improve, partly underpinned by some recovery of international commodity prices, in the case of countries that rely on exports of these goods. Significant growth is also expected in commodity importing countries, notably China.

The highest growing develop country should be the United States, with improvements also taking place in Europe and Japan, according to the IMF.

For Brazil, the Fund forecasts a 0.2% growth for this year and of 1.7% in the next, against a 3.6% decline in 2016. The forecast for 2017 remained the same as the one made available in January, but the estimate for 2018 increased in 0.2 percentage point.

The Fund believes the country will come out of recession and that its recovery will be based on the reduction of political uncertainties, a loosening of the monetary policy and progress with the reforms agenda.

For the bloc that includes the Middle East, North Africa, Afghanistan and Pakistan, IMF forecasts a 2.6% growth in 2017 and a 3.4% expansion in 2018, against a growth of 3.9% in 2016. The forecast for this year was revised down in 0.5 percentage point over the one made in January, with next year’s estimate also brought down 0.1 percentage point.

A reduction in growth among oil exporting nations is expected due to the agreement for an output cut among both members and non-members of the Organization of the Petroleum Exporting Countries (OPEC). Besides, the conflicts in the region are still impacting the economic activity.

Saudi Arabia, the region’s largest economy, is expected to growth 0.4% this year and 1.3% the next, against 1.4% in 2016. In addition to the oil output cuts due to the OPEC agreement, the low growth expected for 2017 comes from fiscal adjustment policies.

*Translated by Gabriel Pomerancblum and Sérgio Kakitani


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