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22/01/2018 - 20:06hs

IMF revises up growth forecasts for the global economy

The report World Economic Outlook, made public this Monday in Davos, Switzerland, brings more optimistic outlooks for the global and Brazilian economies. For the Arab region, forecasts remained unchanged.

São Paulo – The International Monetary Fund (IMF) revised up its forecasts regarding the growth of the world economy for 2018 and 2019, after the estimated result for 2017 stood 0.1 percentage point above the fund’s forecast. The data is included in the report World Economic Outlook, released this Monday (22) in Davos, Switzerland, before the opening of the World Economic Forum.

According to the fund, the world economy grew 3.7% in 2017 and it should expand 3.9% in 2018 and 2019, 0.2 percentage point above the forecasts released in October with the then latest report. The changes, according to the IMF, reflects two important factors: the increased global growth momentum and the expected impact of the recently approved US tax policy changes.

Much as it is welcome, the current recovery doesn’t leave the Fund’s managing director, Christine Lagarde, completely satisfied. In a speech delivered before the report’s release, she pointed to three factors: about one fifth of emerging markets and developing countries saw their per capita incomes decline in 2017; at the same time that the economy is expanding, needed reforms are not being done; and there’s an uncertainty regarding the next year, since the long period of low interest rates left the financial sector more vulnerable.

“As I have been saying recently, the time to repair the roof is when the sun is shining,” said Lagarde. “In conclusion, we should certainly appreciate this season of broad-based growth momentum. But we should also use this time to find lasting solutions to the challenges facing the global economy in 2018.”

Brazil and Arabs

The IMF also revised up the growth forecasts for the Brazilian economy. The Brazilian GDP should grow 1.9% this year, according to the fund’s latest report, and in 2019 it should expand 2.1%. The new data surpasses in 0.4 and 0.1 percentage point, respectively, the forecasts released in October.

In the regions of the Middle East, North Africa and Pakistan, expectations still point to growth in 2018 and in 2019, but they remain subdued at around 3.5%, according to the IMF. “While stronger oil prices are helping a recovery in domestic demand in oil exporters, including Saudi Arabia, the fiscal adjustment that is still needed is projected to weigh on growth prospects,” said the report.

*Translated by Sérgio Kakitani

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