Poland’s growth stable amidst downgraded global projections: IMF

The IMF’s just-released World Economic Outlook (WEO) report points to a destabilizing effect Britain’s decision to leave the European Union in a June referendum has had on the global economy.

At the same time, Gian Maria Milesi-Ferretti, deputy head of the IMF’s research department, said that growth forecasts for Central and Eastern Europe have undergone only slight adjustments. Poland’s expansion is, meanwhile, estimated at 3.7 percent next year.

“Brexit has thrown a spanner in the works,” IMF chief economist Maury Obstfeld said at a press conference on Tuesday.

The fund has decreased its projection for the global economy for this year to 3.1 percent, down from 3.2 percent forecast in the IMF’s April report.

Brexit has also triggered a downgrade in Great Britain, with the country’s growth expected to slow down to 1.3 percent, which is 0.9 percentage lower than forecasts made before July’s referendum had shown.

The authors of the report write that “the global outlook for 2016-17 has worsened, despite the better-than-expected performance in early 2016,” especially in the eurozone and Japan.

The post-Brexit “deterioration reflects the expected macroeconomic consequences of a sizable increase in uncertainty, including on the political front,” the authors add.

“This uncertainty is projected to take a toll on confidence and investment, including through its repercussions on financial conditions and market sentiment more generally,” the authors go on to say, adding that “more negative outcomes are a distinct possibility.” (aba)

Source: IAR, IMF