IMF Changes Its Tune: Brexit Britain’s Economy Will Grow Faster Than Europe

Managing Director of the International Monetary Fund Kristalina Georgieva speaks on new research on the financial services sector and its impact on income inequality in Washington DC

But, the International Monetary Fund in the January 2020 WEO downgraded its growth forecast for Sub Saharan African region to 3.5 percent citing constrains and deteriorating public finance in South Africa.

India's GDP growth in the July-September quarter of 2019 slowed sharply to 4.5 per cent, the weakest pace in more than six years, as manufacturing output hit a slump and consumer demand as well as private investment weakened.

IMF in its Article IV consultation report on India released last month said the Indian government should avoid a fiscal stimulus to boost the economy and, instead, opt for an easier monetary policy.

It stated: "Global growth, estimated at 2.9 percent in 2019, is projected to increase to 3.3 percent in 2020 and inch up further to 3.4 percent in 2021".

"In sub-Saharan Africa, growth is expected to strengthen to 3.5 percent in 2020-21 (from 3.3 percent in 2019)".

Similarly, the International Monetary Fund however downgraded its growth forecast for the global economy to 3.3 percent in 2020, representing a one percentage point decline from 3.4 percent forecast made in October past year.

Monday's downgrades were driven by a downward revision of India's economy and increased social unrest around the world previous year.

India, Asia's third-largest economy, is expected to grow by 5.8% in 2020, a 1.2 percentage point markdown from the organization's October forecast.

While the baseline growth projection is weaker, developments since the fall of 2019 point to a set of risks to global activity that is less tilted to the downside compared to the October 2019 WEO.

"However, few signs of turning points are yet visible in global macroeconomic data", the Fund added.

It also lowered the 2021 forecast by a bit more to 3.4 percent.

On a more optimistic note, the worldwide crisis lender says overall risks are less tilted to the downside compared to October, thanks to tentative signs that a slowdown in manufacturing activity is bottoming out, a shift by central banks to lower borrowing costs (which is growth-boosting) and sporadic "favorable" news on negotiations to resolve the trade war between the United States and China.

"Globally the big story is this extraordinary pivot by central banks in 2019", BlackRock Vice Chairman Philip Hildebrand said on Bloomberg Television.

Earlier this week, Georgieva sang the praises of the newly-signed US-China phase one trade agreement arguing it would help ease the uncertainty that has stood in the way of global economic breakthroughs.

In its report on Nigeria, it said, "Growth in Nigeria is expected to remain subdued".

Growth will improve slightly to 3.4 percent in 2021, but that estimate, too, was cut by 0.2 percentage point from October, said the Washington-based global crisis lender.

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