Latest Growth Projections for Developing Countries: Asia doing better, everywhere else worse

July 9, 2009

     By Duncan Green     

The IMF has just revised April’s World Economic Outlook growth projections for 2009 and 2010 (see table). Here’s the summary on developing countries:

IMF projections July 09

IMF projections July 09

‘Emerging and developing economies are projected to regain growth momentum during the second half of 2009, albeit with notable regional differences.

Low-income countries are facing important challenges of their own because official aid has fallen and these economies are particularly vulnerable to swings in commodity prices.

Growth projections in emerging Asia have been revised upward to 5.5 percent in 2009 and 7.0 percent in 2010 [see previous post on China and India here]. The upgrade owes to improved prospects in China and India, in part reflecting substantial macroeconomic stimulus; and a faster-than-expected turnaround in capital flows. However, the recent acceleration in growth is likely to peter out unless there is a recovery in advanced economies.

Growth projections for Latin America have been lowered by 1.1 percentage points in 2009, primarily because production has been hit much harder by the global trade slowdown than initially expected. However, the region is benefiting from rising commodity prices, and growth projections have been revised up by 0.7 percentage points in 2010.

The growth projections for central and eastern Europe and the Commonwealth of Independent States (CIS) have been revised downward by 1.3 and 0.7 percentage points in 2009 and upward by 0.2 and 0.8 percentage points in 2010, respectively. Developments differ appreciably across countries but many have been badly affected by the global financial crisis, with capital flows reversed and commodity exports sharply contracted, although the recent recovery of commodity prices is forecast to raise demand in key CIS economies.

Growth projections for emerging Africa and the Middle East have been revised downward by 0.3 and 0.5 percentage points in 2009, respectively, while those for 2010 are broadly unchanged. Both regions have been more negatively affected by the drop in global trade than previously expected, with Middle Eastern oil exporters using their financial reserves to prop up domestic demand.’