(MENAFN- AFP) Emerging economies around the world are going through their fifth consecutive annual slowdown as prices for their raw materials exports tumble and China's voracious growth slackens, the IMF said Tuesday.
Painting a somber picture, the International Monetary Fund's global survey singled out the shift in commodities markets, as well as political tensions and the dip in China's vertiginous growth with knock-on effects worldwide.
According to the Washington-based fund, emerging markets and developing countries could see 4.0 percent growth in 2015 and 4.5 percent in 2016, but in both cases that is a sharply gloomier two percentage points down on the previous prediction made in July.
"In an environment of declining commodity prices, reduced capital flows to emerging markets and pressure on their currencies, and increasing financial market volatility, downside risks to the outlook have risen, particularly for emerging market and developing economies," the IMF said.
Among the worst performers, Russia's GDP is forecast to plunge 3.8 percent this year and 0.6 percent the next, while Brazil's contraction will measure three percent, followed by a further one percent.
China, whose incredible growth has fueled much of the world economy, should grow 6.8 percent this year and 6.3 percent the next, maintaining the slowdown that has badly worried foreign markets this year.
South Africa will see modest growth of 1.4 percent in 2015, followed by 1.3 percent in 2016, the IMF said. India -- the other member of the BRICS, along with Brazil, Russia, China and South Africa -- is in the best health, with forecasted growth of 7.3 and 7.5 percent.
- Modest expansion -
Worldwide, economic growth is forecast by the IMF at 3.1 percent in 2015 and an only slightly greater expansion of 3.6 percent in 2016. Those forecasts come in 0.2 percentage points below the previous estimate given in July.
Partly that more pessimistic view is due to a worse than expected outlook for Brazil, with collateral damage from Latin America's biggest economy spreading through the region and into the Caribbean.
"If this happens it will be the worst development for Brazil since the 1930s when we last saw GDP falling for two consecutive years," analyst Alex Agostini at Austin Rating told AFP.
For Latin America, the only worse performer than Brazil will be Venezuela with a catastrophic 10 percent drop in 2015 and six percent the next year. Overall the region will be a little worse than stagnant, with GDP falling 0.3 percent this year and growth of 0.8 the next.
In 2016 the emerging markets overall are likely to get relief, the IMF said.
"Growth in emerging market and developing economies is projected to rebound in 2016," the IMF said.
A drop in inflation is expected in countries like Russia, and to a lesser extent Brazil, that have seen strong currency devaluation.
"Growth in countries in economic distress in 2015 (including Brazil, Russia, and some countries in Latin America and in the Middle East), while remaining weak or negative, is projected to be higher than in 2015, and domestic demand in India is projected to remain strong," the report said.
However much will depend, the IMF said, on US monetary policy with all eyes on when the Fed decides to jack up rates again, for the first time since 2006.
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