ents and Outlook: Implications owth for 2018–19 is projected to remain steady at its 2017 level of 3.7 percent (see table). astprojection and Central Asia this is 0.2 percentage point Regions lower than the April 2018 World Economic Outlook,
rowth outlook marked down ber of major economies. thearea could Real GDP Growth, 2017–23 he weaker outlook forIn the euro to remain steadychallenges at its 2017 level of 3.7 percent (see table). 2017 2018 2019 2020–23 for some countries in tes, while thepose outlook for 2018 North the Middle East, Afghanistan, ge point lowerAfrica, thanandthe April 2018 World Economic Outlook, World 3.7 3.7 3.7 3.6 Pakistan (MENAP) and ged at 2.9 percent, the forecast Euro Area 2.4 2.0 1.9 1.5 the Caucasus and Central Asia (CCA) regions, particularly for oil importers with strong United States 2.2 2.9 2.5 1.6 as been Real revised due2017–23 to GDPdown Growth, trade ties. The regions may also face headwinds e China 6.9 6.6 6.2 5.9 the projected moderation in activity in nnouncedfromtrade measures. Growth 2017 Russia 2018 2019 2020–23 1.5 1.7 1.8 1.5 China. 8 3.7MENAP3.7 3.7 3.6 s have alsoWorld been marked down 2.2 2.4 2.7 3.0 Oil prices Euro rose Areaabove $75 a barrel in June 2.4 MENAP 2.0oil exporters 1.9 1.5 1.2 1.4 2.0 2.3 o area and United Kingdom, 2018the — the highest level since November United States 2.2 2.9 2.5 1.6 of which: non-oil GDP growth 2.4 2.3 2.4 3.1 — reflecting the collapse in Venezuela’s surprises2014 that suppressed activity China 6.6oil importers 6.2 5.9 production and unexpected outages in Canada 6.9 MENAP 4.1 4.5 4.0 4.3 wth and Libya. Prices dropped back to about $70 1.5 Russia 1.7 1.8 1.5 CCA 4.1 4.0 4.0 4.2 18. The aoutlook for emerging barrel following the June 2018 decision by n 2.4and gas2.7 exporters 3.0 3.9 3.8 3.9 4.2 theMENAP Organization of the Petroleum Exporting 2.2 CCA oil oping economies is also weaker, MENAP oil exporters 1.2 1.4 2.0 2.3 Countries (OPEC) and other major oil-exporting of which: non-oil GDP growth 2.9 3.8 3.8 4.1 m, countries (togetherfor OPEC+) increase 2.4 of which: non-oil GDPtogrowth 2.3and gas2.4 3.1 downward revisions some CCA oil importers 6.0 5.0 4.8 4.6 production, but prices have increased recently ity MENAP oil importers 4.1Sources:4.5 4.0 4.3 National authorities; and IMF staff calculations. due to geopolitical tensions. While the impact of Sources: National authorities; and IMF staff calculations. ging market economies due to 4.0 4.0 4.2 USCCA sanctions on Iranian exports could further lift 4.1 prices in the near term, financial oil prices are expected to Reserve has raised the federal funds target rate exchange rate flexibility and interest rate hikes, pecific factors, tighter CCA oil and gas exporters 3.9 3.8 3.9 4.2 decline over the medium term due to increased by 75 basis points and has signalled additional and intervention in the foreign exchange market. r, oftensions, which: non-oil GDPhigher growth 3.8100 4.1end of Evolution ofbasis Oil3.8points Prices , geopolitical and production by US shale producers and OPEC+ 2.9 tightening of by the 1 5.0 members figure). 2019. With higher US interest rates, a stronger Market sentiment remains vulnerable to CCA(see oil and gasNevertheless, importers medium- 6.0 4.8 (APSP, US dollars a barrel)4.6 bills. Forterm instance, is futures pricesChina have firmed significantly US dollar, and some episodes of financial market uncertainties stemming from global trade tensions Sources: National authorities; and IMF staff calculations. o relative to the baseline in the May 2018 Regional volatility, pressure points have emerged in some and geopolitical developments, including related 80 to experience weaker Economicsomewhat Outlook: Middle East and Central Asia emerging market and developing economies. to Iran and Turkey. A systemic escalation of Following a sharp rebound early in 2018, trade tensions would further dampen the global 2019 in Update. the aftermath of recently capital flows to these economies have weakened recovery and depress medium-term growth (see Evolution of Oil Prices gher Although still supportive of growth, global considerably since mid-April, although they the “Scenario Box—Global Trade Tensions” in d trade measures. 70 (APSP,1conditions US dollars financial havea barrel) started to tighten. stabilized somewhat in July. Policy reactions the October 2018 World Economic Outlook).
T
Table: Real GDP Growth, 2017–23.
Between March and September, the US Federal
err outlook80for the euro area could ntly for some countries in the enges 70 st, Afghanistan, North Africa, and MENAP) and the Caucasus and uld ia (CCA)60regions, particularly e porters with strong trade ties. The and ay also face headwinds from the 50 nd moderation in activity in China.
60
50
40
Sanctions against Iran will undercut its near-term trade and growth prospects, increasing the risk of spillovers, while developments in Turkey could impact the region through trade and financial linkages, as well as through market confidence effects. A worsening of these developments, or faster-than-anticipated monetary policy tightening in advanced economies, increases the risk of a sudden reversal in global risk appetite. The MENAP and CCA regions would be vulnerable in this environment, especially those countries that rely heavily on international capital to meet external financing needs.
APSP spot price
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In this context, policy uncertainty has increased WEO current APSP projection and near-term risks to global growth have 30 Apr.downside. 18 APSPTightening projectionglobal shifted WEO to the Oct. 17and APSP projection financialWEO conditions softening growth in large economies limit prospects for upside surprises, while risks highlighted in the April 20 APSP spot price 2018 World Economic Outlook have become more pronounced or have partially materialized. WEO current APSP projection Medium-term risks remain skewed to the WEO Apr. 18 APSP projection downside, reflecting the continued build-up of WEO Oct. 17 APSP projection financial vulnerabilities and the possibility of shifts to unsustainable policies in the face of weaker growth prospects. The materialization of these risks would have significant implications Sources: Haver Analytics; and IMF staff calculations. for countries in the MENAP and CCA regions Note: APSP = average price of spot prices;through WEO =their IMF,impact World Economic on external Outlook. demand, 1 The average of UK Brent, Dubai Fateh, and West Texas Intermediate crude prices, oil remittances, capital flows, commodity and financing conditions. i prices.
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The 40 $75 a barrel in June rose above he e highest level since November na. flecting the 30 collapse in Venezuela’s n and unexpected outages in e d Libya.20Prices dropped back r 70 a barrel following the June ela’s sion by the Organization of the
so far have been varied, including a mix of
Evolution of Oil Prices (APSP,1 US dollars a barrel). Sources: Haver Analytics; and IMF staff calculations.
Note: APSP = average price of spot prices; WEO = IMF, World Economic Outlook.
Source: International Monetary Fund (IMF),
The average of Haver UK Brent, Analytics; Dubai Fateh, andand West Texas crude oil prices. November 2018 Sources: IMFIntermediate staff calculations. ctober 2018 World Economic Outlook, Global Financial Stability Report, and Fiscal Monitor for a more comprehensive discussion of the Note: APSP = average price of spot prices; WEO = IMF, World Economic Outlook. e. 134 | Capital Finance International 1 The average of UK Brent, Dubai Fateh, and WestCFI.co Texas Intermediate crude oil prices. 1