Risks for the world include low commodities prices, China’s slowdown and rate hikes
The IMF has downgraded its outlook for Canadian growth to one per cent this year because of the impact of lower oil and commodities prices.
It also has revised its expectations for global growth downwards to 3.1 per cent, the lowest since 2009.
- Canadian GDP outlook slashed to 1.2% with 3 provinces in recession
- IMF slashes outlook for Canadian economy
In a report Tuesday in advance of the IMF-World Bank annual meetings this week in Lima, Peru, it highlights the downside risks to the world economy from the economic slowdown in China and low prices for commodities.
The recovery it expected earlier in the year has become uneven, it said in its World Economic Outlook with marginal advances in developed economies and slowing in most emerging economies.
“Six years after the world economy emerged from its broadest and deepest postwar recession, the holy grail of robust and synchronized global expansion remains elusive,” said Maurice Obstfeld, IMF director of research.
Growth slower in most nations
“Despite considerable differences in country-specific outlooks, the new forecasts mark down expected near-term growth marginally but nearly across the board.”
It has revised its estimate for Canadian GDP growth downward by half a percentage point from its July forecast to one per cent this year, and to 1.7 per cent in 2016. Last year, the IMF was forecasting 2.2 per cent growth for the Canadian economy.
A side report explores how the sharp decline in commodity pricesover the last three years has hurt economies dependent on commodities, including Canada, Chile and Australia.
“The weak commodity price outlook is estimated to subtract almost one percentage point annually from the average rate of economic growth in commodity exporters over 2015–17 as compared with 2012–14,” the IMF said.
“In exporters of energy commodities, the drag is estimated to be larger: about 2¼ percentage points on average over the same period.”
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