IMF lowers GDP growth

Sep 28, 2011

The International Monetary Fund (IMF) has revised real GDP growth for Uganda to 5.5% from 6.5%. “5.5% is a realistic projection.

By David Mugabe

The International Monetary Fund (IMF) has revised real GDP growth for Uganda to 5.5% from 6.5%. “5.5% is a realistic projection.

This is based on global growth coming down. It is still quite good though and a lot of countries would be happy with this,” said IMF resident representative Thomas Richardson speaking on phone from Washington.

Real Gross Domestic Product (GDP) is the sum total of all economic activities in a country.

About two months ago, the IMF was bullish about growth in Uganda, projecting that it would rebound to 6.5% in 2011 and 7% next year despite the volatility in the global markets.

World trade will grow at a much slower rate, the World Trade Organisation (WTO) economists predicted this week.

WTO economists revised their 2011 trade forecast to 5.8%, down from their earlier conservative estimate of 6.5% following the uncertainty in the global markets.

The WTO predictions are also based on slower growth whereas the outlook for the global economy is increasingly uncertain.

“The multilateral trading system has been instrumental in maintaining trade openness during the crisis, thereby avoiding even worse outcomes.

“Members must remain vigilant. This is not the time for go-it-alone measures,” the WTO director-general Pascal Lamy said in a statement.

Lamy said with the growing uncertainty, it is time to strengthen and preserve the global trading system so that it keeps performing.

Since the original forecast for 2011 was issued in April, developed economies in particular have been buffeted by strong headwinds, including the lingering effects of the earthquake and tsunami in Japan, the prolonged budget impasse and credit downgrade in the US, and the euro zone debt crisis.

Financial markets have suffered on the back of disappointing output and employment data which have resulted in dampening consumer confidence and to the recent turmoil in financial markets.

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