Azernews.Az

By Nigar Abbasova

The International Monetary Fund (IMF) has lowered the forecast for the world economic growth for 2016 and 2017, referring to the growing uncertainty caused by Brexit.

The growth rate of global economy is expected to stand at 3.1 and 3.4 percent in 2016 and 2017 respectively, according to the updated IMF World Economic Outlook (WEO). In its April report the Fund forecasted the growth of 3.2 and 3.5 percent in 2016 and 2017 respectively.

IMF said that taking into account the better-than-expected economic activity so far in 2016 and the likely impact of Brexit, the global growth forecasts for 2016 and 2017 were both marked down by 0.1 percentage points relative to the April 2016 WEO.

“The real effects of Brexit will play out gradually over time, adding elements of economic and political uncertainty that could be resolved only after many months,” IMF chief economist Maurice Obstfeld said in the text of remarks for a press briefing.

CIS countries

The Fund has also insignificantly improved its forecast on the economic growth in CIS countries for 2016 and 2017.

The current forecast stands at -0.6 and 1.5 percent respectively. The GDP growth in CIS countries excluding Russia is forecasted at 1 percent in 2016 while the figure stands at 2.5 for 2017.

The Funds forecasts that the economy of Russia will face a reduction of 1.2 percent in 2016 while the rate will increase by 1 percent in 2017.

Azerbaijan

In its June report the Fund forecasted that the growth in Azerbaijan will turn negative with -2.4 percent in 2016. Nevertheless, it is expected to start picking up in 2017.

"Growth is expected to rise to about 2.5 to 2.75 percent over the medium-term as gas production and exports rise and reforms start to take effect. Full implementation of a strong structural reform agenda could increase the economy's growth potential to around 4 to 5 percent", the report said.

The fund also reported that the economic growth of Azerbaijan fell to 1.1 percent in 2015 following a decline in oil pieces and currency depreciation in trading partner’s economies.

Earlier the IMF has recommended Azerbaijan to tighten the supervision over the financial sector and continue structural reforms.

The International Monetary Fund (IMF) which was established in 1945 is an organization of 189 countries, working to foster global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth, and reduce poverty around the world. Azerbaijan joined the IMF in 1992.

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Nigar Abbasova is AzerNews’ staff journalist, follow her on Twitter: @nigyar_abbasova

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