IMF expects growth in SA to pick up, but escalating trade tension is a huge risk

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IMF expects growth in SA to pick up, but escalating trade tension is a huge risk

5:56 CAT | 16 Jul 2018

While SA is on track for growth, the risks to global growth are mounting, according to the International Monetary Fund (IMF).

The IMF’s latest world economic outlook released on Monday showed that growth in SA was expected to pick up in the second half of 2018, with expectations of growth of 1.5% in 2018 and 1.7% in 2019.

However, while the IMF continues to project global growth rates of 3.9% for both 2018 and 2019, it warned that the risk of worse outcomes had increased, even in the near term.

The rate of expansion appears to have peaked in some major economies and growth has become less synchronised, reads the outlook.

“Amid rising tensions over international trade, the broad global expansion that began roughly two years ago has plateaued and become less balanced,” said IMF economic counsellor and director Maury Obstfeld.

“The risk that current trade tensions escalate further — with adverse effects on confidence, asset prices and investment — is the greatest near-term threat to global growth.”

As dark clouds threaten global growth, the IMF has urged governments to pay more attention to economic equity among citizens.

“The widespread political malaise driving many current policy risks, including on the trade front, has roots in several countries’ experiences of noninclusive growth and structural transformation, heightened by the financial crisis of 2007-09 and the difficulties that followed,” said Obstfeld, who added that without intervention, the political future would darken.

Source: Business Day Live