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Global Growth to Remain Subdued

Global Growth to Remain Subdued

24 July 2019 – While global economic growth is expected to remain subdued, at 3.2%, this year, the International Monetary Fund’s (IMF’s) latest edition of the ‘World Economic Outlook (WEO)’ points to anticipated growth of 3.4% for sub-Saharan Africa.

With global growth expected to pick up to 3.5% in 2020, sub-Saharan Africa is likely to see growth of 3.6% in 2020, 0.1 percentage points lower for both years than in the April WEO.

Strong growth in many nonresource-intensive countries partially offset the lacklustre performance of the region’s largest economies, the IMF said on Tuesday.

The organisation added that while higher, albeit volatile, oil prices had supported the outlook for Angola, Nigeria and other oil-exporting countries in the region, growth in South Africa was expected at a subdued pace for this year, following a very weak first quarter.

South Africa’s projected growth has been revised downward to 0.7% this year and 1.1% for 2020, 0.5 percentage points and 0.4 percentage points lower than in the April WEO respectively.

This, the IMF said, reflected a larger-than-anticipated impact of strike activity, energy supply issues in mining and weak agricultural production in South Africa.

The rest of the emerging market and developing economy group is expected to grow at 4.1% in 2019, rising to 4.7% in 2020. The forecasts for 2019 and 2020 are 0.3 and 0.1 percentage points lower, respectively, than in April this year, the IMF said.

Globally, growth forecasts have been impacted by generally softening inflation, which points to weaker-than-anticipated global activity. Investment and demand for consumer durables have been subdued across advanced and emerging market economies as firms and households continue to hold back on long-term spending, the IMF said.

Accordingly, global trade, which is intensive in machinery and consumer durables, remains sluggish.

The IMF further mentioned that the projected growth pickup in 2020 was precarious, presuming stabilisation in currently stressed emerging market and developing economies and progress toward resolving trade policy differences. Source (Engineering News) https://bit.ly/2Grr5Iy