IMF foresees global economy accelerating to 3.5%. in 2017

Maurice Obstfeld, IMF's economic counselor and director of the research department, said on Tuesday that momentum in the global economy has been building since the middle of last year, allowing the IMF to reaffirm its earlier forecasts of higher global growth this and next year.

Finance ministers and central bank governors from the Group of 20 major economies, known as the G20, are also scheduled to meet on the sidelines of the April 21-23 conference.

While raising upside possibilities of consumer and business confidence in advanced economies, he warned of the headwinds facing the global economy. The IMF thinks there will be 1.7 percent growth this year in the region, unchanged from last year's performance and easing to 1.6 percent in 2018.

"After contracting by 1.5 percent in 2016 because of disruptions in the oil sector coupled with foreign exchange, power, and fuel shortages, output in Nigeria is projected to grow by 0.8 percent in 2017 as a result of a recovery in oil production, continued growth in agriculture, and higher public investment".

The U.S. economy is poised to gain steam this year, but that rosy forecast could change if President Trump's promises of tax reform fail to materialize. Plummeting oil prices forced energy companies to slash production.

In advanced economies, especially Europe, the cyclical recovery from the crises of 2008-09 and 2011-12 will help keep growth modestly above potential over the next few years, the report said.

Financial markets have marched upward.

The IMF's recent projections exceed the Hungarian ministry's projections for 1.6% average annual inflation in Hungary in 2017 and 3.1% in 2018.

Numerous concerns - including rolling back financial regulation, pulling away from the multilateral trading system and restricting immigration - are centerpieces of US President Donald Trump's policy program, but also are issues visible in the bitter French election campaign, as well as in Britain's planned exit from the European Union.

With regard to risks to the country's growth, the International Monetary Fund said potential spillovers from lower growth in China or higher global financial volatility will be manageable for the Philippines, owing largely to its economic fundamentals, ample policy space and limited trade and financial linkages with the Asian economic powerhouse. But Bob Baur, chief global economist at Principal Global Investors, noted that Trump has retreated from those threats: His administration declined last week to accuse China of undervaluing its currency. He says commodity prices have "firmed" since early past year, but at a relatively low level.

The outlook faces headwinds from chronically weak productivity growth and policies that could constrict trade, the International Monetary Fund said.

  • Zachary Reyes