IMF downgrades outlook for world economy again

“Despite the weaker global economic outlook, the Philippines growth forecast for 2016 was only marginally lowered from 6.3 percent to 6.2 percent to reflect the more challenging external environment”, Peiris said.

These risks relate mostly to the ongoing adjustments of the global economy, namely China’s rebalancing, lower commodity prices, and the prospects for the progressive increase in interest rates in the United States. Emerging market and developing economies are facing increased challenges and key risks are related to China’s slowdown, stronger dollar, geopolitical tensions and renewed global risk aversion.

“The slowdown and rebalancing of the Chinese economy, lower commodity prices and strains in some emerging market economies will continue to weigh on growth prospects”, the International Monetary Fund warned.

The fund said China’s shift to an economy less driven by exports and manufacturing will see its economy slow to 6.3% this year and 6% in 2017, unchanged from its October forecasts.

In an update to its biannual World Economic Outlook, the Washington-based lender cut this year’s growth forecast to 3.4 percent from 3.6 percent. “We may be in for a bumpier ride this year especially in developing economies”.

Speaking after the International Monetary Fund cut its global growth forecasts for the third time in less than a year, Obstfeld also said that it is crucial that China makes its overall economic strategy and currency strategy, clear.

Growth forecasts for most emerging market and developing economies reveal a slower pickup than previously predicted. South Africa’s GDP growth is expected to slow to 0.7 per cent in 2016 and accelerate to 1.8 per cent in 2017.

In Latin America, the downward revision of more than a percentage point is related to the global uncertainty and Brazil’s economy, the greatest in the region, which contracts 3,5% this year.

The IMF has downgraded its global growth projections for this year and the next.

Europe’s emerging economies would grow at a broadly steady pace, although some would suffer deceleration in 2016, since Russian Federation could remain in recession in 2016.

Nearly a year ago today, an investor reacted as Chinese shares plunged 6.3 per cent after the country’s securities regulator imposed margin trading curbs on several major brokerages.

For India, it retained the growth forecast at 7.3 % for the current fiscal and 7.5 % for 2016-17 and 2017-18.