By Dipo Olowookere
The International Monetary Fund (IMF) has re-affirmed its 0.8 percent growth forecast for Nigeria’s economy in 2017.
In its World Economic Outlook, October 2017 titled ‘Seeking Sustainable Growth: Short-Term Recovery, Long-Term Challenges’ released on Tuesday, the IMF said the major threats to the country’s economy remain policy implementation, forex market segmentation, and banking system fragilities.
In the report, the IMF said the global upswing in economic activity was strengthening, noting that global growth, which in 2016 was the weakest since the global financial crisis at 3.2 percent, is projected to rise to 3.6 percent in 2017 and to 3.7 percent in 2018.
It said the growth forecasts for both 2017 and 2018 are 0.1 percentage point stronger compared with the April 2017 World Economic Outlook (WEO) forecast.
Broad-based upward revisions in the euro area, Japan, emerging Asia, emerging Europe, and Russia—where growth outcomes in the first half of 2017 were better than expected—more than offset downward revisions for the United States and the United Kingdom.
But the recovery is not complete: while the baseline outlook is strengthening, growth remains weak in many countries, and inflation is below target in most advanced economies, the IMF said.
It pointed out that commodity exporters, especially of fuel, are particularly hard hit as their adjustment to a sharp step down in foreign earnings continues. And while short term risks are broadly balanced, medium-term risks are still tilted to the downside.
The welcome cyclical pickup in global activity thus provides an ideal window of opportunity to tackle the key policy challenges—namely to boost potential output while ensuring its benefits are broadly shared, and to build resilience against downside risks.
A renewed multilateral effort is also needed to tackle the common challenges of an integrated global economy.
It further said growth prospects for emerging and developing economies are marked up by 0.1 percentage point for both 2017 and 2018 relative to April, primarily owing to a stronger growth projection for China.
The country’s 2017 forecast (6.8 percent, against 6.6 percent in April) reflects stronger growth outturns in the first half of 2017 as well as more buoyant external demand. For 2018, the revision mainly reflects an expectation that the authorities will maintain a sufficiently expansionary policy mix to meet their target of doubling real GDP between 2010 and 2020.
Growth forecasts have also been marked up for emerging Europe for 2017, reflecting stronger growth in Turkey and other countries in the region, for Russia for 2017 and 2018, and Brazil in 2017.
