International Monetary Fund changes its growth forecast for Nigeria

International Monetary Fund changes its growth forecast for Nigeria

"Multiple factors weigh on the region's outlook, including weak oil output growth, which offsets an expected pickup in non-oil activity (Saudi Arabia); tightening financing conditions (Pakistan); US sanctions (Iran); and, across several economies, geopolitical tensions", the International Monetary Fund said in its WEO Update, which also notes that the global expansion has weakened.

Among the threats cited in the report were more trade tariffs, a renewed tightening of financial conditions, a no-deal Brexit and a deeper-than-anticipated slowdown in China.

Speaking a the World Economic Forum in Davos in Switzerland this morning, Deputy Managing Director of the IMF David Lipton also said that when the downturn comes, most countries will not be as well equipped to deal with it as they were a decade ago.

It also lowered the economic growth forecast for next year to 2.2 per cent from the 2.5 per cent it previously predicted.

Stock markets across the world fell Tuesday amid further signs that the global economy is weakening. Even with the decline Tuesday, the S&P 500 is up 5.1 percent in 2019 and has jumped more than 12 percent since hitting its recent low on December 24.

The Chinese economy is transitioning from one based on trade to one driven by domestic consumption, says Fotios Raptis, senior economist at TD Bank.


The World Bank and the Organization for Economic Cooperation and Development have also downgraded their world growth forecasts. A range of triggers beyond escalating trade tensions could spark a further deterioration in risk sentiment with adverse growth implications, especially given the high levels of public and private debt.

It said emerging market and developing economies had been tested by hard external conditions over the past few months amid trade tensions, rising United States interest rates, dollar appreciation, capital outflows, and volatile oil prices.

International Monetary Fund suggested strengthening macroprudential frameworks would address high private debt burdens and balance-sheet currency and maturity mismatches in some economies.

"India and France are likely to surpass the United Kingdom in the world's largest economy rankings in 2019, knocking it from fifth to seventh place in the global table", the report said.

"Growth in the euro area is set to moderate from 1.8 percent in 2018 to 1.6 percent in 2019 (0.3 lower than projected last fall) and 1.7 percent in 2020".

In Italy, where anti-establishment governing parties are arguing with Brussels over a planned spending boost, growth of only 0.6 per cent is expected this year against a previous forecast of 1 per cent. The unchanged projection relative to the October 2018 WEO reflects the offsetting negative effect of prolonged uncertainty about the Brexit outcome and the positive impact from fiscal stimulus announced in the 2019 budget. Nvidia fell 4.2 percent to $150.40 and Texas Instruments lost 2.9 percent to $96.55.

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