International Monetary Fund says Zambia public debt rising at unsustainable pace

Maurice Obstfeld chief economist at IMF

Maurice Obstfeld chief economist at IMF

Globally, the economic picture has brightened a bit with the world growth for this year projected at 3.6%, up from last year's 3.2%.

The International Monetary Fund on Tuesday raised Israel's economic outlook for this year and next as it raised its forecast for global growth.

Maurice Obstfeld, chief economist at the IMF, said the reduction in the fund's long-term outlook for the United Kingdom from an annual growth rate of 1.9 per cent to 1.7 per cent was a direct outcome of leaving the EU. Last month, in its medium-term program Turkey said it expected economic growth of 5.5 percent in 2017 with inflation at 9.5 percent. The upward revisions in its growth forecasts including for the euro area, Japan, China, emerging Europe, and Russian Federation more than offset downward revisions for the United States, the United Kingdom, and India. The worldwide lending agency also notes that inflation remains worryingly low, a sign that the world economy still has not returned to full health in the aftermath of the Great Recession of 2007-2009.

In contrast, compared with the April 2017 WEO forecast, growth has been marked down for 2017 in the United Kingdom and for both 2017 and 2018 in the USA, implying a 0.1 percentage-point aggregate growth downgrade for advanced economies in 2018.

Economic growth in Kenya is seen slowing to 5 percent this year from 5.8 percent last year, the International Monetary Fund said.

The OECD leading indicator, which is created to anticipate turning points in economic activity, projected an upbeat scenario of economic expansion in the countries that represent most of the world's economic output.

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The growth forecast for this year was raised to 3.6 percent from 3.5 percent and the outlook for next year was lifted to 3.7 percent from 3.6 percent.

Another UN agency, the Economic and Social Council for Asia and the Pacific (ESCAP), also in May, expected this year's growth rate to be 7.1 percent before rising to 7.5 percent next year. FNB senior economist Mamello Matikinca has also said that GDP growth below 1% was expected for SA in 2017.

Despite the good news, the report comes with a warning that the global recovery is far from complete with weak growth rates still persisting in several countries - particularly among fuel exporters hit by a fall in foreign earnings - and inflation still below the target rates in most advanced economies.

It also warned of food shortages and drought in The Gambia, South Sudan and Somalia.

Such a performance would mean the economy falling behind its biggest rivals in growth terms after being the second-fastest in the G7 a year ago despite the Brexit vote.

IMF's 6.7 percent growth rate projection is in line with the Reserve Bank of India's forecast.

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