International Monetary Fund projects 8.8% growth for Ghana in 2019

Irving Hamilton
April 11, 2019

Growth for 2018 was revised down by 0.1 percentage point relative to the October 2018 World Economic Outlook (WEO), reflecting weakness in the second half of the year, and the forecasts for 2019 and 2020 are now marked down by 0.4 percentage point and 0.1 percentage point, respectively.

According to the latest edition of World Economic Outlook (WEO), released during 2019 Spring Meeting, India is expected to grow at 7.3 per cent in fiscal year 2019-20.

The 2019 outlook is also the weakest since the financial crisis, and reflects slowing economic growth in most advanced economies, and signs that higher reciprocal export tariffs introduced by the USA and China previous year are weighing on trade. The IMF, however, expected current account deficit to narrow at 5.2 percent in 2019 and 4.3 percent in 2020 as opposed to 6.1 percent in 2018.

"With this weakness expected to persist into the first half of 2019, our new World Economic Outlook projects a slowdown in growth in 2019 for 70 percent of the world economy", she wrote in a blog on Tuesday.

This table illustrates country-by-country 2018 economic growth along with projections for 2019 and 2020.

Across sub-Saharan Africa and the MENAP region, 41 economies, accounting for around 10pc of the global GDP in purchasing-power-parity terms and close to one billion in population, are projected to grow by less than advanced economies in per capita terms over the next five years, implying that their income levels are set to fall further behind those economies.

Other encouraging indications for a pick-up in global economic growth in 2020 include the US Federal Reserve's decision to put interest rates on hold, and stronger productivity data from China's manufacturing sector and the US employment market, the report said. The growth is expected to be on the back of increased oil production.

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In its third downgrade since October last year, the International Monetary Fund said that the global economy would likely grow 3.3 percent this year, the slowest expansion since 2016.

With the Indian economy projected to slow down further in the fiscal fourth quarter, the central bank's focus has shifted from inflationary concerns to sustaining the growth momentum.

The report advised that continued implementation of structural and financial sector reforms with efforts to reduce public debt remain essential to secure the economy's growth prospects.

Other multilateral lenders such as the also Washington-based World Bank and the Manila-based Asian Development Bank earlier cut their 2019 growth forecasts for the Philippines because of the impasse in Congress on the 2019 national budget, the prolonged dry spell due to El Niño, and a slowing external demand.

The IMF foresees the Chinese economy growing 6.3 per cent this year, down from 6.6 per cent in 2018.

"Excessive stimulus to support near-term growth through a loosening of credit standards, or a resurgence of shadow banking activity and off-budget infrastructure spending, would heighten financial vulnerabilities, reduce future policy space, and raise downside risks to medium-term growth", the International Monetary Fund said.

Meanwhile, it downgraded the growth outlook on the United States on signs that a fiscal stimulus supported by tax cuts was producing less activity than expected.

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