The experts working for the International Monetary Fund have downgraded their global economic growth forecast for 2016 and 2017. According to the revised forecast, the experts expect weaker growth – only 3,4% and 3,6% in 2016 and 2017 respectively. At the same time, the IMF revised its economic forecasts for some specific economies.
In particular, they say that Brazil is going to gain only 3,5% this year, which is some 2,5% below the figures given in the previous forecast. At the same time, they expect Saudi Arabia’s economy to slow down by 1.2% and 1,9% in 2016 and 2017 respectively.
The USA is another economy with revised forecast. Now they expect only 2,6% growth this year instead of 2.8% expected previously. Russia is expected to lose 1% of GDP this year instead of 0.6%. As for Russia, it is expected to se a slowdown due to Western sanctions and low oil prices. It should also be noted that the IMF expects other CIS states to lose a bit GDP over the next 2 years. The CIS GDP is expected to gain as little as 1.7% in 2017.
At the same time, European economies are expected to advance slowly but surely, with a chance of a slight slowdown this year. When it comes to China, the IMF’s forecast stays unchanged – still 6.3% for 2016. As for 2017, China is expected toe see its GDP grow only by 6%.
For India, it is 7.5% both in 2016 and 2017. The similar forecasts for Japan remain unhanged as well – 1% in 2016 and 0.3% in 2017.
Reasons For Revision
The experts say that there are several reasons why they had to revise the forecasts. First off, it is China and its economic slowdown, which has been affecting the entire global economy. Nothing fancy given the fact that China is the second-biggest economy in the world. Some other reasons to consider are tougher conditions in credit markets and a stronger dollar. Lower commodity prices are also on the list of major factors affecting commodity economies and their national currencies only adding fuel to the fire. The European problem of migrants from the Middle East is another problem the IMF is concerned about. Those migrants are going to affect European labor markets, only aggravating economic problems in Europe. At the same time, there are several major conflicts going on on the planet, which cannot but affect the entire global economy since they keep on affecting tourism as well as finances and trade. Still, the IMF say that cheaper oil may well contribute to global economic growth.
