"Growth in Saudi Arabia, the region's largest economy, is expected to slow to 0.4 percent in 2017 because of lower oil production and ongoing fiscal consolidation, before picking up to 1.3 percent in 2018", the International Monetary Fund said.
The central bank cautioned, however, that Canada's economy might be unable to maintain the pace set in early 2017.
Maurice Obstfeld, economic counsellor and research department director at the International Monetary Fund, said the move could have been done to ensure less economic uncertainty further down in the Brexit negotiations. "A variety of factors weigh on their outlooks, including China's transition to a more sustainable pattern of growth that is less reliant on investment and commodity imports; a protracted adjustment to structurally lower commodity revenues in some commodity exporters; high debt levels everywhere; sluggish medium-term growth prospects in advanced economies; and domestic strife, political discord, and geopolitical tensions in a number of countries".
"Instead, it now accepts an over-performance of nearly seven times above the target of 0.5 percent to 3.3 percent, or 5.8 billion euros above its estimations in the autumn of 2016", they added. It also raised its forecast for 2018 growth to 3.0%, up from just 2.1%.
In emerging and developing countries, macroeconomic conditions are expected to improve, partly underpinned by some recovery of worldwide commodity prices, in the case of countries that rely on exports of these goods. The IMF has admitted that Britain's economy has been stronger than it had expected since last year's vote to leave the European Union and said the challenge now is for the United Kingdom is to successfully navigate that exit and trade deals. This is better than the most recent forecast by the Australian Treasury and released by the Australian government in December a year ago, which predicted GDP would "pick up to 2¾ per cent in 2017-18 as the detraction from mining investment eases".
The IMF expects the unemployment rate to improve to 10.6% this year (compared to 10.7% previously estimated) and to 10.1% next year. At the same time, adverse weather conditions and civil unrest threaten several low-income countries with starvation. "One salient threat is a turn toward protectionism, leading to trade warfare", Obstfeld said at a media briefing, according to a report from Reuters.
"Whether the current momentum will be sustained remains a question mark", he said in a press conference. Overall, Europe will record an economic growth of 2 percent, and theemerging countries, which also includes Romania, will record a 3 percent GDP growth.
While raising upside possibilities of consumer and business confidence in advanced economies, he warned of the headwinds facing the global economy.