Nigeria To Witness Sluggish Economic Growth In 2019

Govt decides to ‘immediately’ approach IMF

Govt decides to ‘immediately’ approach IMF

The Fund says the global economy's growth target has dropped by 2 percent from the initial 3.9 percent.

But it predicts that USA growth will slow to 2.5 percent next year as the effect of recent tax cuts wears off and as President Donald Trump's trade war with China takes a toll.

Under the 2015 Act, China only meets one of the three criteria for currency manipulation, namely that a country runs a significant bilateral trade surplus with the U.S. of at least US$20 billion.

A sharp tightening would test the resilience of the global financial system a decade after the failure of Lehman Brothers, said the International Monetary Fund, noting that regulatory frameworks have been enhanced and the banking system has become stronger.

As interest rates rise in advanced economies, prompting investors to take their money in search of higher returns, the IMF recommended emerging economies take steps to insulate themselves from an exodus of funds. The country returned to a growth rate of 1.5 percent in 2017 after two years of decline.

Elevated risk aversion and sharper tightening could come about due to growing concerns about the resilience and policy credibility of emerging markets, trade tensions, political and policy uncertainty (for instance around Brexit), and faster-than-expected monetary policy normalisation.

The IMF, whose autumn meetings with the World Bank get under way on the Indonesian resort island of Bali this week, also noted that while the banking system has been shored up by regulators in the decade since the 2008 global financial crisis, easy financial conditions are contributing to a buildup of vulnerabilities such as high debt levels and "stretched" asset valuations. For 2018/19, the real economic growth was expected to moderate, but still, the International Monetary Fund expected Iran's economy to grow by 4 percent in 2018/19, forecasting stable oil production in line with the OPEC cap on Iran's production.

Reflecting such sentiments, growth in trade of goods and services across the world was revised down 0.6 point from the July forecast to 4.2 percent in 2018 and 0.5 point to 4.0 percent in 2019, according to the report.

On Monday, it downgraded world growth forecasts for next year, blaming new trade barriers.

"We continue to closely monitor developments in the yuan; we remain concerned about the recent depreciation of the yuan", said the official, who spoke on condition of anonymity.

US President Donald Trump has accused China of deliberately manipulating its currency to gain a trade advantage, claims Beijing consistently rejected.

The head of the World Trade Organization warned that a "full-blown commercial war" could shrink global trade by almost 18 percent and also knock worldwide GDP, hurting the United States, China, and others.

"I'm assuming that there might be a programme request on their part, but that has not been discussed and we will explore that this afternoon", she said.

The Briton Woode institution is also projecting growth of 1.9 and 0.8 percent for Nigeria and South Africa while it is predicting contraction of 0.1 percent for Angola.

In September, the USA implemented another round of tariffs on $200 billion worth of Chinese goods, which were met with countermeasures out of Beijing on $60 billion worth of US goods.

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