SOFIA (Bulgaria), January 20 (SeeNews) – The International Monetary Fund (IMF) raised its outlook for economic growth in emerging and developing Europe this year to 2.9% from 0.1% projected in October 2014.
The IMF emerging and developing Europe region comprises Albania, Bosnia and Herzegovina, Bulgaria, Croatia, Hungary, Kosovo, Lithuania, Macedonia, Montenegro, Poland, Romania, Serbia, and Turkey.
In 2016 the IMF expects that emerging and developing Europe will post 3.1% economic growth, it said in its World Economic Outlook (WEO), released on Monday. In October 2014, the IMF projected that the region's economy would shrink by 0.2% in 2016.
"Developments since the release of the October WEO have conflicting implications for the growth forecasts," the IMF said. "On the upside, the decline in oil prices driven by supply factors—which, as noted, are expected to reverse only gradually and partially—will boost global growth over the next two years or so by lifting purchasing power and private demand in oil importers."
In emerging market and developing oil importers, more of the windfall gains from lower prices are assumed to accrue to governments - for example, in the form of lower energy subsidies - where they may be used to shore up public finances, it added.
Despite cheaper oil, global growth is forecast to rise moderately in 2015–16, from 3.3% in 2014 to 3.5% in 2015 and 3.7%, revised down by 0.3% for both years relative to the October 2014 forecasts.