Growth expected in Low Income Developing Countries despite a slowing global economy

GLOBAL – Low-Income Developing Countries (LIDC) are expected to record average annual growth of some five per cent in 2018-2019, a new IMF policy paper has shown.

The IMF policy paper on macroeconomic developments and prospects in LIDC noted that this growth is a reasonably robust performance against the backdrop of loss of momentum in the global economy.

The LIDC are a group of 59 IMF member countries primarily defined by income per capita level below a certain threshold (set at $2,700 in 2016).

“The LIDCs are expected to record average annual growth of some five per cent in 2018-2019, a reasonably robust performance against the backdrop of loss of momentum in the global economy,” the Washington-based fund said.

It noted that experiences varied markedly within the group, with countries in fragile situations typically recording weaker-than-average performance.

“Looking ahead, growth is expected to pick up marginally in 2020 and beyond, although risks to the global economy threaten this outlook,” the IMF said.

Oil dependent economies, including Nigeria, will however continue to fare less than countries reliant on other export sectors, a pattern in place since the drop of oil prices in 2014.

Nigeria’s economy grew by 2.28 per cent in real terms in the third quarter of this year, compared to 2.12 per cent in Q2 and 2.10 per cent in Q1, according to the National Bureau of Statistics.

According to the IMF, the rapid growth in public debt recorded between 2013 and 2017 slowed significantly in 2018-19, although the general trend was still an upward drift in debt burden.

The IMF directors noted that public debt vulnerability remained a serious cause of concern in many LIDCs, with more than two-fifths of countries assessed to be at high risk of, or already in, debt distress.

They emphasised the importance of strengthening debt management capacity and improving data quality and transparency, to be supported by implementation of the joint bank-fund multi-pronged approach to tackle debt vulnerability.

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