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The International Monetary Fund (IMF) lowered the world economic outlook to 3.1 percent from 3.2 percent as the global economy is being threatened by Britain’s decision to leave the European Union (EU). surroundings. The IMF released its World Economic Outlook Update, Tuesday, its first report since Brexit.It expected the global economy to grow 3.1 percent this year, down 0.1 percentage point from its previous estimate in April. It also lowered the projection for the next year to 3.4 percent from 3.5 percent.

The IMF cited political and economic uncertainties following Brexit as well as troubles in European banks and excessive debt in China as major risks to the global economy.

The negative impact will be especially concentrated in the United Kingdom, euro zone and Japan. It lowered the outlook for the United Kingdom by 0.2 percentage points, while pulling down the estimate for next year by 0.9 percentage points. Japan also had its outlook slashed by 0.2 percentage points, reflecting the negative impact of the strengthening Japanese yen on its economic growth.

The fund also suggested more dismal scenarios, though it added that they aren’t very likely. If the financial market continues to be unstable and some financial businesses move to the euro zone from the United Kingdom, the global economic growth rate may fall to 2.9 percent. In a more severe case, in which the U.K. economy enters a recession due to the plunge in consumption and investment, the world economy will grow a mere 2.8 percent.

The outlook for other emerging market and developing economies remains diverse.

Growth projections were revised down substantially in sub-Saharan Africa, reflecting challenging macroeconomic conditions in its largest economies, which are adjusting to lower commodity revenues. In Nigeria, economic activity is now projected to contract in 2016, as the economy adjusts to foreign currency shortages as a result of lower oil receipts, low power generation, and weak investor confidence. These revisions for the largest low-income country are the main reason for the downgrade in growth prospects for the low-income developing countries group.

In South Africa, GDP is projected to remain flat in 2016, with only a modest recovery next year. In the Middle

East, oil exporters are benefiting from the recent modest recovery in oil prices while continuing fiscal consolidation in response to structurally lower oil revenues, but many countries in the region are still plagued by strife and conflict. – Online