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International Monetary Fund says Nigeria’s economy doing poorly, cuts growth projection

International Monetary Fund says Nigeria’s economy doing poorly, cuts growth projection”

In the United States, momentum is still strong as fiscal stimulus continues to increase, but the forecast for 2019 has been revised down due to recently announced trade measures, including the tariffs imposed on $200 billion of U.S. imports from China.

He did not specify how much in emergency financing the government would seek, but he had earlier said the government would need at least $8 billion to meet external debt payments through the end of the year.

He said the talks would be held for "such a programme, a stabilisation, a recovery programme, on which basis we could overcome this financial crisis". However, some sources pointed out that Pakistan had to pay back around $6 billion to the International Monetary Fund which the country had obtained during the last PML-N government, so the size of the programme might go up to $10 to $12 billion.

The eurozone's 2018 growth forecast was cut to 2.0 percent from 2.2 percent previously, with Germany particularly hard hit by a drop in manufacturing orders and trade volumes.

With much of the US-China tariff war's impact to be felt next year, the Fund cut its 2019 US growth forecast to 2.5% from 2.7% previously, while it cut China's 2019 growth forecast to 6.2% from 6.4%.

Obstfeld said financial markets have overly emphasized short-term movements in China's currency, adding that the yuan has often quickly recovered from periods of volatility in recent years. This is still lower than the global economic growth of 3.7 percent.

The IMF has been recommending that Chinese authorities de-emphasize the quantity of growth to focus more on its quality and sustainability to allow the economy to better withstand shocks, Obstfeld said.

Some energy-rich emerging market countries have fared better due to higher oil prices, with Saudi Arabia and Russian Federation receiving upgrades to growth forecasts.

The dominant United States economy has been shielded from the ill effects so far due to the stimulus provided through tax cuts and spending policies, but that will wear off by 2020.

On the eve of its annual meetings in Bali, Indonesia, the fund on Tuesday projected a global expansion of 3.7 per cent this year and next, down from the 3.9 per cent projected three months ago.

"We'll be listening very attentively when and if they come to us", Obstfeld said.

In a new simulation exercise to show trade war risks to the global economy, the International Monetary Fund modeled the effect of an all-out US-China trade war, coupled with threatened global US auto tariffs and retaliation from trading partners.

The model also includes the effects of a reduction in business confidence that reduces investment and leads to a tightening of financial conditions.

President Donald Trump has slapped tariffs on US$250 billion in Chinese goods this year, and Beijing has retaliated with levies US$110 billion of American products. Output could fall by more than 1.6 per cent in China and over 0.9 per cent in the USA next year, according to the IMF's models.



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