Strong start to 2017 bodes well for Canada, International Monetary Fund says

Apr 19, 2017, 01:41
Strong start to 2017 bodes well for Canada, International Monetary Fund says

"Momentum in the global economy has been building since the middle of last year, allowing us to reaffirm our earlier forecasts of higher global growth this year and next", Maurice Obstfeld, economic counsellor and director of the International Monetary Fund (IMF) Research Department, told reporters at a news conference here.

The IMF also lifted its United Kingdom forecasts for 2018 to 1.5 per cent, to "reflect the stronger-than-expected performance of the United Kingdom economy since the June Brexit vote".

"At the same time, a combination of adverse weather conditions and civil unrest threaten several low-income countries with mass starvation".

In its latest World Economic Outlook, the Fund said that chronically weak advanced economies are expected to benefit from a cyclical recovery in global manufacturing and trade that started to gain momentum last summer. By contrast, the Bank of Canada projected last week that the economy will expand by 2.6 per cent this year, up from its prior estimate of 2.1 per cent growth.

The IMF resident representative also said higher commodity prices will push up inflation to 3.6 percent in 2017, then slightly decelerate to 3.3 percent in 2018.

Its UK growth forecast was significantly boosted from 1.5 percent to 2.0 percent this year, slowing to 1.5 percent in 2018.

The report said the increased growth forecasted for China reflected stronger-than-expected policy support.

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One bright spot however is gas-rich Qatar which is expected to register 3.4-percent growth this year, compared with 2.7 percent in 2016.

Moreover, spillovers from slower growth in China or higher global financial volatility should be manageable for the Philippines because of its strong economic fundamentals, ample policy space, and limited trade and financial linkages with China, Peiris said.

"A strengthening of the USA and global economy.allow us to make some positive assumptions about business conditions for the remainder of our fiscal year", said William Furman, chief executive officer of worldwide railroad giant, Greenbriers Company, based in Lake Oswego, Ore.

"Though highly uncertain, medium-term growth prospects have also diminished in the aftermath of the Brexit vote because of the expected increase in barriers to trade and migration, as well as a potential downsizing of the financial services sector amid possible barriers to cross-border financial activity", the International Monetary Fund added.

But the IMF, Germany and other nations are anxious that overly-aggressive actions by the USA could spark a tit-for-tat trade war that stalls global growth.

Global trade has fostered "economic miracles" around the world, driving growth and lifting millions out of poverty, he stressed. U.S. President Donald Trump has plans to soften rules for banks as he believes that the current regulation hinders lending to the real economy.