Jul 25, 2019 (LBO) – The International Monetary Fund (IMF) has cut its growth forecasts for the global economy for this year and next, a statement said.
It predicts growth of 3.2 percent in 2019, down from its April forecast of 3.3 percent while next year it is set to pick up to 3.5 percent next year, although that is below its earlier forecast of 3.6 percent.
Issing its quarterly update of its World Economic Outlook the IMF said global trade tensions and continued uncertainty are sapping the strength of the world economy, which faces a “precarious” 2020.
Growth “remains subdued”, the IMF says, and there is an urgent need to reduce trade and technology tensions.
The IMF has raised its growth forecast for the UK this year to 1.3 percent from 1.2 percent.
The revision for the UK reflects what the report calls a stronger-than-expected first three months of the year, boosted by pre-Brexit stockpiling.
The Fund has also raised the US GDP forecast by three-tenths to 2.6 percent for 2019, but weakening demand, in part due to the trade conflicts and tariffs, points to “slowing momentum over the rest of the year.” The US economy is then expected to slow to 1.9 percent in 2020.
China, which is the main target of US trade actions, was already experiencing a slowdown. But “the negative effects of escalating tariffs and weakening external demand have added pressure,” the report said.
The report downgraded Chinese growth by a tenth this year and next, to 6.2 percent and 6.0 percent.