International Monetary Fund increases growth projection for Nigeria

World leaders confront Donald Trump at last year's G7 meeting in Quebec

World leaders confront Donald Trump at last year's G7 meeting in Quebec Credit AFP

Raises 2020 United States forecast to 1.9% from 1.8%. But oil prices have been stabilizing since February this year.

"Industrial production figures and surveys of purchasing managers suggest that the slower momentum in global growth during the second half of 2018 is likely to continue in early 2019", the global lender said.

"Growth in the Middle East, North Africa, Afghanistan, and Pakistan region is expected to decline to 1.5 percent in 2019, before recovering to about 3.2 percent in 2020".

However, Gopinath said that a continued trade tension between the United States and China would have a negative impact on oil prices and other commodities.

In late March, SARB Governor Lesetja Kganyago said the central bank expected SA's GDP growth for 2019 to average 1.3%, down from the bank's January projection of 1.7%.

U.S. Treasury Secretary Steven Mnuchin disputed the IMF's assessment that U.S. growth was slowing and told lawmakers he was not concerned about a recent inversion of the Treasury yield curve - often a harbinger of recession. All the estimates are 0.2 percentage points less than its previous assessment in January. However, there are "important differences" within emerging markets and developing economies. While the improvement in financial markets has been rapid, those in the real economy have been slow to materialize.

Still, America's ongoing tensions with China and other major trading partners remain a risk for the global economy.

Over the medium term, the International Monetary Fund sees global growth hitting a plateau at 3.6% as advanced economies see softer expansion while emerging markets "stabilize". Growth in Canada is expected to pick up to 1.9 per cent by then. It said inflation in Pakistan would remain 7.6 percent, despite a projected 6 percent.

But chances of further cuts to the outlook are high, the Fund said in its World Economic Outlook report. There is an uneasy truce on trade policy, as tensions could flare up again and play out in other areas (such as the auto industry) with large disruptions to global supply chains.

Global growth is forecast to slow to 3.3% in 2019 from 3.6% in 2018 with a downside risk due to trade tensions and chaotic Brexit.

It is "imperative that costly policy mistakes are avoided", the International Monetary Fund emphasised in this latest WEO as it urged greater cooperation among nations. Policymakers need to work cooperatively to help ensure that policy uncertainty doesn't weaken investment.

In the near term, continued fiscal consolidation is needed to bring down India's elevated public debt.

"Across all economies, the imperative is to take actions that boost potential output, improve inclusiveness, and strengthen resilience". Additionally, it calls for multilateral cooperation to address trade conflicts, climate challenges, cybersecurity issues and to enhance the effectiveness of the global tax system. In that case, policymakers will need to adjust.

The IMF said it supported the U.S. Federal Reserve's decision to pause its rate-hiking cycle, which the global lender said would support the U.S. and world economies this year by easing financial conditions.

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