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KARACHI: The International Monetary Fund’s (IMF) World Economic Outlook (WEO) on Monday projected that growth will slow down in Middle East, North Africa, Afghanistan (MENA) and Pakistan region and slip to 2.6 per cent in 2017 but will recover to 3.3pc in 2018.
The forecast reflects primarily a slowdown in activity in oil exporters, before recovering in 2018.
The latest IMF’s World Economic Outlook (WEO) forecast for 2017-18 is not very different from the one issued in April 2017, however the growth outcome in 2016 is estimated to have been considerably stronger in light of higher growth in Iran.
“The recent decline in oil prices, if sustained, could weigh further on the outlook for the region’s oil exporters,” the outlook notes.
The forecasts states that emerging and developing economies are projected to see a sustained pickup in activity, with growth rising from 4.3pc in 2016 to 4.6pc in 2017 and 4.8pc in 2018.
The WEO projects that China’s growth is expected to remain at 6.7pc in 2017, the same level as in 2016, and to decline only modestly in 2018 to 6.4pc.
“The forecast for 2017 was revised up by 0.1 percentage point, reflecting the stronger than expected outturn in the first quarter of the year underpinned by previous policy easing and supply-side reforms (including efforts to reduce excess capacity in the industrial sector). For 2018, the upward revision of 0.2 percentage point mainly reflects an expectation that the authorities will delay the needed fiscal adjustment (especially by maintaining high public investment) to meet their target of doubling 2010 real GDP by 2020. Delay comes at the cost of further large increases in debt, however, so downside risks around this baseline have also increased,” the report said.
Growth in India is forecast to pick up further in 2017 and 2018, in line with the April 2017 forecast. “While activity slowed following the currency exchange initiative, growth for 2016––at 7.1pc––was higher than anticipated due to strong government spending and data revisions that show stronger momentum in the first part of the year. With a pickup in global trade and strengthening domestic demand, growth in the Asean-5 economies is projected to remain robust at around 5pc, with generally strong first quarter outturns leading to a slight upward revision for 2017 relative to the April WEO,” the forecast added.
Published in Dawn, July 25th, 2017
