Revision of World Economic Outlook from IMF, October 2016

On Tuesday, October 4, International Monetary Fund released the new edition of its World Economic Outlook (WEO). According to the updated estimates, global economic growth in 2016 will slow to 3.08 percent from 3.2 percent in 2015. This is a downward revision relative to the previous April's estimate in which world's GDP growth was expected to rise this year.

Released twice a year, in April and October, WEO contains projections of key economic and financial indicators such as GDP, inflation, unemployment, the balance of payments, government finance, trade, and major commodity prices at the global level and in many countries.

In the October edition of WEO, global economic growth was revised down mainly due to the subdued growth in advanced countries, especially in the United States. The growth of the U.S. GDP in 2016 will be 0.8 percentage points weaker than expected. On the contrary, the growth of some developing economies was revised up. Thus, the recession in Russia in 2016 will be less sharp than it was estimated previously. The same is for the Brazilian economy, which will decline a bit less dramatically than was projected in October, and start to recover so far in 2017.

Improvement of the forecast for the emerging economies is connected with better prospects of economic growth in China in the near-term and some strengthening of energy prices. So, IMF expectations of average crude oil prices for 2017 were revised up by 24% from $40.99 to $50.64 per barrel.Energy prices firming along with removal of 

Energy prices firming along with the removal of sanctions on Iran resulted in the upward revision of the republic's current account balance. While in April, current account balance of Iran was estimated to be -0.79 percent of GDP this year, in October's edition of WEO it turned positive to 4.17 percent of GDP.