IMF Leaves Its Estimates for Global Economic Growth in 2016-2018 Practically Unchanged

3 february 2017

The economies of the US and China are expected to maintain the current growth rates, Russia is slowly pulling out of recession; the economic situation in Brazil is improving as well. The state of the global economy this year can be described as 'satisfactory', write the Analytical Center experts in their current economic trends bulletin Taking the Pulse: Updated IMF Forecast. Focus on: Development Prospects in Japan.

January 16 the IMF released another update for its World Economic Outlook (WEO). It has been 3 months since the last publication; the main event that has happened since that, which can have a major impact on the global economy in the next few years, was the presidential elections in the US and their unexpected result that took many analysts completely by surprise. Nevertheless, the IMF has left its estimates for the global economic growth in 2016-2018 practically unchanged, albeit with a proviso that “there is now uncertainty about the economic policy of the future US administration and its global impact.” The new forecast from the IMF envisions higher oil prices after the OPEC managed to cut a deal about capping oil production with other major producers. The outlook for the developed economies for 2017-2018 is more positive thanks to higher growth expectations in the US, while for the emerging markets it is now marginally worse: the growth forecast for China's economy has been adjusted upwards as the Chinese government is expected to stimulate the economy; the forecast for Russia remains unchanged, but for a number of other major countries, especially India, Brazil and Mexico, the updated projected growth figures are now lower.

This issue of the bulletin also analyzes the problems and development prospects of the Japanese economy, which has been having some serious problems with the growth being held back by deflation and a large national debt. Experts believe the two decades of very low economic growth in Japan are the result of the country getting caught in a 'deflation trap': Consumer prices fall regularly, which prompts both households and companies to put off spending, and the economy stagnates as a result.

For more see the bulletin Taking the Pulse: Updated IMF Forecast. Focus on: Development Prospects in Japan.

For other issues of our bulletin on current trends in the global economy see Publications.