The International Monetary Fund (IMF) released its bi-annual report on the state of the global economy, noting that global growth is "subdued" and uneven. Ahead of the IMF/World Bank Annual Meetings in Washington, the World Economic Outlook report projects the economy to grow by 3.1 percent in 2016. The Fund notes "the precarious nature of the recovery eight years after the global financial crisis." The report notes strong growth in Asia but weaker growth in Latin America, Africa, the Caribbean and "advanced economies."
"Too many countries are still dealing with the effects of the global financial crisis," noted Eric LeCompte, a United Nations finance expert and the Executive Director of the religious development coalition Jubilee USA. "Some of the poorest countries face nearly insurmountable economic challenges."
The IMF projects 2016 growth of 1.6% in advanced economies and 4.2% in developing and emerging economies, with most of that growth coming from emerging economies in Asia. The Fund projects negative growth for Latin American and Caribbean countries and only 1.4% growth in Sub-Saharan Africa. The largest economies in South America and Africa (Brazil and Nigeria respectively) are both expected to contract in 2016.
On October 3rd, the IMF executive board voted to extend zero-interest lending to low-income countries. IMF Managing Director Christine LaGarde praised the decision and noted zero-interest loans would help low-income countries guard against future "shocks." According to the IMF, 55 of 70 low-income countries are currently in "debt distress" or at risk of debt distress.
"The IMF's decision means less debt for some of the world's poorest countries," stated LeCompte. "Extending zero percent interest on these loans helps mitigate the shocks many poor countries are struggling with."
Read the October 2016 World Economic Outlook
Read more about the IMF's decision to extend zero-interest loans to low-income countries.