By Mathew Dadiya, Abuja

The International Monetary Fund (IMF) Wednesday, predicted a 3.4 percent Gross Domestic Product(GDP) growth for Nigeria, Angola and other oil producing countries in sub-Saharan Africa in 2019 and 3.6 percent in 2020.

According to IMF, 0.1 percentage point lower for both years than in the April forecast, as strong growth in many non-resource-intensive countries partially offsets the lackluster performance of the region’s largest economies.

The Fund in its World Economic Outlook (WEO) published on Wednesday stated that higher albeit, volatile oil prices have supported the outlook for Angola, Nigeria, and other oil-exporting countries in the region.

But growth in South Africa is expected at a more subdued pace in 2019 than projected in the April WEO following a very weak first quarter, reflecting a larger-than-anticipated impact of strike activity and energy supply issues in mining and weak agricultural production.

Activity in the Commonwealth of Independent States is projected to grow at 1.9 percent in 2019, picking up to 2.4 percent in 2020. 

The 0.3 percentage point downward revision to 2019 growth reflects a downgrade to Russia’s outlook following a weak first quarter.

Against this backdrop, global growth is forecast at 3.2 percent in 2019, picking up to 3.5 percent in 2020, 0.1 percentage point lower than in the April WEO projections for both years.

GDP releases so far this year, together with generally softening inflation, point to weaker-than-anticipated global activity. Investment and demand for consumer durables have been subdued across advanced and emerging market economies as firms and households continue to hold back on long-range spending. 

More so, downward risks have intensified since the April 2019 WEO, the IMF said.

The risks according to the Fund, include escalating trade and technology tensions, the possibility of a protracted risk-off episode that exposes financial vulnerabilities accumulated over years of low interest rates, geopolitical tensions, and mounting disinflationary pressures that make adverse shocks more persistent.

Disruptions to trade and tech supply chains: Business confidence and financial market sentiment have been repeatedly buffeted since early 2018 by a still-unfolding sequence of US tariff actions, retaliation by trading partners, and prolonged uncertainty surrounding the United Kingdom’s withdrawal from the European Union.

Accordingly, global trade, which is intensive in machinery and consumer durables, remains sluggish. The projected growth pickup in 2020 is precarious, presuming stabilization in currently stressed emerging market and developing economies and progress toward resolving trade policy differences.

Risks to the forecast are mainly to the downside. They include further trade and technology tensions that dent sentiment and slow investment; a protracted increase in risk aversion that exposes the financial vulnerabilities continuing to accumulate after years of low interest rates; and mounting disinflationary pressures that increase debt service difficulties, constrain monetary policy space to counter downturns, and make adverse shocks more persistent than normal.

Multilateral and national policy actions are vital to place global growth on a stronger footing. The pressing needs include reducing trade and technology tensions and expeditiously resolving uncertainty around trade agreements (including between the United Kingdom and the European Union and the free trade area encompassing Canada, Mexico, and the United States). Specifically, countries should not use tariffs to target bilateral trade balances or as a substitute for dialogue to pressure others for reforms.