Among the two leading economies in Sub Saharan Africa, Nigeria’s
economy
would grow faster than that of South Africa in 2017, according to the International Monetary Fund (IMF).
would grow faster than that of South Africa in 2017, according to the International Monetary Fund (IMF).
Division Chief, Research
Department, IMF, Oya Calesun, gave the forecast while briefing the
media on the World Economic Outlook (WEO) released Tuesday at the
IMF/World Bank Annual Meetings in Washington D.C.
According to the
organization which had earlier projected in July that South Africa’s
economy would experience more growth than Nigeria, political uncertainty
has reduced consumer and business confidence in South Africa.
The
IMF had at that time projected that South Africa’s economy would grow
by 1 per cent in 2017, while Nigeria will experience a 0.8 per cent
economic expansion.
It
explained Nigeria’s growth this year was projected at 0.8 per cent due
to recovering oil production as well as improved output in the
agricultural sector.
The Nigerian economy grew by 0.55 per cent in
the second quarter of 2017, signposting the end of a crippling
recession after five consecutives quarters of contraction.
The IMF
however expressed concerns over weaknesses in Nigerian banks and said
that the situation might weigh on economic growth in the medium term.
It
observed, that policy implementation and market segmentation in a
foreign exchange market which remained dependent on the Central Bank of
Nigeria (CBN) interventions would have some impact on the country in the
future.
According to the IMF official, “Nigeria is expected to
emerge from the 2016 recession caused by low oil prices and the
disruption of oil production. Growth in 2017 is projected at 0.8 per
cent, owing to recovering oil production and ongoing strength in the
agricultural sector.
“However, concerns about policy
implementation, market segmentation in a foreign exchange market that
remains dependent on central bank interventions (despite initial steps
to liberalise the foreign exchange market), and banking system
fragilities are expected to weigh on activity in the medium term.”
The
IMF director said growth prospects across emerging market and
developing economies remained heterogeneous, with emerging Asian
countries generally growing at a fast pace.
He, however, stated
that many countries in Latin America, sub-Saharan Africa and the Middle
East would struggle with subpar performance.
According to him,
economic growth in sub-Saharan Africa is projected to reach 2.6 per cent
in 2017 and 3.4 per cent in 2018, with sizeable differences across
countries.
“Downside risks have risen because of idiosyncratic
factors in the region’s largest economies and delays in implementing
policy adjustments. Beyond the near term, growth is expected to rise
gradually, but barely above population growth, as large consolidation
needs to weigh on public spending,” Obstfeld added.
According to
the WEO report, the world growth is projected to increase from 3.2 per
cent in 2016 to 3.6 per cent this year and 3.7 per cent in 2018, an
upward revision of 0.1 percentage point for both 2017 and 2018 relative
to April.
Economic activity is projected to pick up speed in all
country groups except for the Middle East, and forecasts of the strength
of the outlook by region have changed only modestly.
Growth is
forecast to increase strongly in emerging market and developing
economies, from an upwardly revised 4.3 per cent in 2016 to 4.6 per cent
in 2017 and 4.9 per cent in 2018, a 0.1 percentage point increase for
2017 and 2018 relative to the April forecast.
The report read in
part, “The upward revisions to the growth forecast primarily reflect
stronger projected activity in China and in emerging Europe for 2017 and
2018.
“As discussed earlier, although commodity importers account
for the lion’s share of growth in emerging market and developing
economies, the projected increase in growth from 2016 is driven
primarily by stronger projected growth for commodity exporters, most
notably Brazil and Russia that experienced severe macroeconomic strains
during 2015-16.”
No comments:
Post a Comment