Emerging Markets Growth at 4.5% in 2019, varies across regions

LAGOS (Capital Markets in Africa) – The International Monetary Fund projected real GDP growth in emerging markets and developing economies at 4.5% in 2019, down from its October 2018 forecast of 4.7%, and compared to growth rates of 2% for advanced economies and 3.5% for the global economy. In comparison, it estimated the emerging markets and developing economies’ real GDP growth at 4.6% in 2018. It noted that emerging markets and developing economies have faced challenging external conditions in the past few months amid rising global trade tensions, higher U.S. interest rates, a stronger US dollar, increased capital outflows from the region, as well as volatile oil prices. Further, it considered that downside risks to the region’s outlook include a further escalation in trade tensions, tighter global financial conditions, increased policy uncertainty, as well as heightened geopolitical tensions in the Middle East and East Asia regions.

The IMF projected economic growth in Emerging & Developing Asia at 6.3% in 2019, unchanged from its October 2018 forecast, reflecting the anticipated slowdown in China’s economic activity and the pickup in India’s growth this year. Further, it projected Sub-Saharan Africa’s (SSA) real GDP growth at 3.5% relative to 3.8% previously, mainly due to lower oil prices that caused downward revisions to Angola and Nigeria’s growth prospects. However, it expected activity to vary and to expand by more than 5% in more than one-third of SSA economies. In parallel, it forecast growth in the Middle East, North Africa, Afghanistan and Pakistan region at 2.4% in 2019, down from a previous projection of 2.7%, due to weaker oil output growth in Saudi Arabia, tighter financing conditions in Pakistan, the re-imposition of U.S. sanc- tions on Iran, as well as to geopolitical tensions. In addition, the Fund anticipated economic activity in the Commonwealth of Independent States at 2.2% in 2019, down from 2.4% in its October 2018 forecast, due to weaker growth prospects in Russia. Further, it projected real GDP growth in Latin America & the Caribbean at 2% this year, down from its previous forecast of 2.2%, amid weaker activity in Mexico and a severe contraction in Venezuela. Also, it revised downward its growth forecast for Emerging & Developing Europe to 0.7% in 2019 from 2% previously.