Ghana's economy won't be fastest growing in Africa in 2018

Randall Padilla
April 18, 2018

That is an improvement on the 3.8 percent global growth seen past year but is unchanged from the forecasts in January.

The prospect of a trade war between the world's two biggest economies has rattled financial markets for weeks.

The report kept the global growth rate projections at 3.9 percent for this year and the next that was made in January.

The IMF said that, despite the economic expansion going forward, there are downside risks such as growing protectionism and geopolitical tensions in East Asia and the Middle East.

The global lender of last resort on Tuesday released an update to its World Economic Outlook report, predicting the world economy to grow by 3.9 percent in 2018 and 2019 - an improvement on the 3.8 percent global growth it expected a year ago.

It also upgraded its forecast for United States growth in 2018 to 2.9%, up from 2.7% previously. But it cautioned that the plan "should be part of a broader package of financial reforms to improve the governance of public sector banks, and banks' debt recovery mechanisms should be further enhanced".

"Despite the good near-term news, longer-term prospects are more sobering", IMF Chief Economist Maurice Obstfeld said.

The country's current account balance is seen at a surplus of 5.7% of GDP this year and 5.2% next year, the International Monetary Fund said. "Fights over trade distract from this vital agenda, rather than advancing it", Obstfeld said.

The IMF upgraded the forecast for the euro area to 2.4 percent for 2018, an upward revision of two tenths compared to the January estimate, with growth for its key members upgraded, especially Spain. The Asian Development Bank and the World Bank have projected the Indian economy to grow at 7.3% in 2018-19.

President Donald Trump, who campaigned on a pledge to protect USA industries from what he argues is unfair foreign competition, has slapped tariffs on steel and aluminum imports.

The World Bank also raised SA's GDP growth forecast for 2018 earlier in March, to 1.4%. It projected that in general, the global economy would grow by 3.9 percent.

In its base forecast, the International Monetary Fund predicted that trade would grow 5.1 percent this year, which would be the fastest pace since 2011.

The US economy is forecast to grow by 2.9%, up 0.6% from the previous forecast. This resulted in smartphones contributing about one sixth of the estimated growth rate of global trade in 2017.

Other reports by AllAboutTopnews

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