International Monetary Fund lifts SA's GDP forecast to 1.5% in 2018

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CHINA-ECONOMY-IMF

The acceleration is driven by faster growth in the euro area, Japan, China, and the United States, as well better performance in Brazil, Mexico and emerging Europe, and underpinned by growing trade and investment. "Instead, it is in danger of being torn apart".

However, in the back-drop of prospects a trade-war between U.S. and China, the International Monetary Fund said that such a development threatens to undermine confidence and derail global growth prematurely.

It was not "paradoxical" that major economies were "flirting with trade war" while economies were expanding because many households had seen little or no benefit from growth.

In its latest World Economic Outlook released on Tuesday, the International Monetary Fund says the global upswing that began in mid-2016 has become broader and stronger, led by faster growth in the Euro area, Japan, China and the US.

In Saudi Arabia, the biggest Arab economy which contracted 0.7 per cent a year ago, 2018 growth was revised up to 1.7 per cent, a 0.1 percentage point increase from the January projections.

The National Bank of Ukraine (NBU) predicts that Ukraine's GDP would accelerate in 2018 to 3.4 percent from 2.5 percent in 2017 and slow to 2.9 percent in 2019 to 2020.

World GDP growth is projected to pick up to 3.9% in FY19 and FY20, but China's GDP growth is expected to gradually slow to 5.5% from 6.6% in 2018.

The eurozone is expected to grow by 2.4% in 2018 and 2% in 2019, up by 0.2 points and unchanged respectively. Both forecasts were unchanged from three months ago.

This compares with locations where smartphones are manufactured, such as Korea, where the production chain of smartphone rleated components is estimated to have contributed one-third of real GDP growth in 2017, while in Taiwan, the contribution is as high as 40 per cent. Obstfeld said this forecast was a best-case assumption based on a Brexit deal that involved zero tariffs and favourable access to the European Union for the City.

Such growth should help the Australian jobless rate ease to 5.2 per cent in 2019 and close to what the Reserve Bank believes to be "full employment" at five per cent.

The IMF urged countries to take advantage of the rise in economic growth levels in the near-term to enact policies and reforms which will strengthen "the potential for higher and more inclusive growth" and to build buffers ahead of the next downturn, including improving financial systems and increasing worldwide cooperation.

"Other after-effects of the crisis seem more durable, however, including higher debt levels worldwide and widespread public scepticism about policymakers' capacity and willingness to generate robust and inclusive growth", Obstfeld added.

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