The International Monetary Fund (IMF) said on Monday it has affirmed its outlook for economic growth in emerging and developing Europe at 3.1% in 2017 and 3.2% next year.
The IMF emerging and developing Europe region comprises Albania, Bosnia and Herzegovina, Bulgaria, Croatia, Hungary, Kosovo, Macedonia, Montenegro, Poland, Romania, Serbia, and Turkey.
The IMF expects the end-2016 GDP growth in emerging and developing Europe to reach 2.9%, down from 3.7% a year earlier, it said in its World Economic Outlook (WEO).
“After a lackluster outturn in 2016, economic activity is projected to pick up pace in 2017 and 2018, especially in emerging market and developing economies,” the IMF said. “However, there is a wide dispersion of possible outcomes around the projections, given uncertainty surrounding the policy stance of the incoming U.S. administration and its global ramifications”.
Emerging market and developing economies face starkly diverse cyclical positions and structural challenges, the IMF noted.
“Economies with large and rising nonfinancial debt, unhedged foreign liabilities, or heavy reliance on short-term borrowing to fund longer-term investments must adopt stronger risk management practices and contain balance sheet mismatches,” the fund warned.
In low-income countries that have seen their fiscal buffers decrease over the last few years, the IMF advised that the priority is to restore those buffers while continuing to spend efficiently on critical capital needs and social outlays, strengthen debt management, improve domestic revenue mobilization, and implement structural reforms—including in education—that pave the way for economic diversification and higher productivity.
Global growth for 2016 is estimated at 3.1%, in line with the October 2016 forecast. In the next two years global growth is projected to be 3.4% and 3.6%, respectively, again unchanged from the October forecasts.
