IMF revised upward its Global Growth Forecasts for 2017 and 2018
The IMF’s new World Economic Outlook (WEO) has raised its global growth forecasts for this year and 2018 marginally from three months ago to 3.6% and 3.7%. Among the country contributions, the forecasts for the US have been lifted from 2.1% in both years to 2.2% and 2.3%. We note the assumption that official policies will be unchanged (ie there will be no fiscal stimulus).

Elsewhere, compared with July, the latest outlook has stronger growth both years in the Eurozone, Japan, Brazil, Russia and China. India still has the fastest growth next year, at 7.4%.

Short-term risks are seen as broadly balanced, medium term tilted to the downside.

The latter are: a sizeable tightening in global financial conditions; financial turmoil in emerging economies, notably China; persistently low inflation in developed economies; a reversal of financial regulation; protectionism; and non-economic and geopolitical factors.

The price assumptions, based on the futures markets, for the Fund’s basket of three crude blends (including UK Brent) are now an increase of 17.4% this year to US$50.3/b and a small decline for 2018 to US$50.2/b.

The outlook’s forecasts for growth in Nigeria this year and next are again unchanged at 0.8% and 1.9%. In what amounts to a commentary on the FGN’s policymaking, projections in the WEO show GDP growth per caput on a PPP basis negative through to 2022.
Trends in world output growth (% chg y/y)
                            2016E    2017F    2018F
World                    3.2          3.6          3.7
US                        1.5           2.2          2.3
Eurozone              1.8            2.1         1.9
Japan                    1.0            1.5         0.7
Brazil                  -3.6            0.7         1.5
Russia                 -0.2            1.8         1.6
India                     7.1            6.7         7.4
China                   6.7            6.8         6.5
SSA                     1.4            2.6         3.4
Nigeria               -1.6            0.8         1.9
South Africa       0.3             0.7         1.1

Sources: IMF, World Economic Outlook, October 2017; FBNQuest Research
Nigeria is expected to emerge from recession this year due to a recovery in oil output and some positives in agriculture. Predictably, the Fund continues to view the CBN’s multiple currency practices, which it terms market segmentation in the fx market, as a barrier to broader recovery.
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