The January 2016 update of the IMF’s World Economic Outlook (WEO) put global growth for 2015 at 3.1 percent. Growth is however projected to pick up to 3.4 percent and further up to 3.6 percent in 2016 and 2017 respectively.
The downside risks to the projected global growth include the slowdown and rebalancing of China’s economy from largely investment and manufacturing towards consumption and services; lower commodity prices, and; the tight financial conditions. Failure to adopt measures to mitigate the adverse effects of these risks could potentially derail the growth prospects of the global economy.
The performance of the domestic economy picked up in the last quarter of 2015, reflected in the ongoing fiscal consolidation and the relative stability in the exchange rate; though inflationary pressures remained elevated.
The domestic banking sector remained sound and solvent in the fourth quarter of 2015, though marginal declines in the key financial soundness indicators were recorded during the period.
