IMF downgraded global growth forecasts for both 2018 and 2019 as some downside risks identified earlier in April have been realized and “the likelihood of further negative shocks to our growth forecast has risen.” The risks included “rising trade barriers and a reversal of capital flows to emerging market economies”. Financial market conditions could “tighten rapidly” if trade tensions and policy uncertainty were to intensify. And, unexpectedly high inflation readings in the US could “lead investors to abruptly reassess risks”
In several key economies, “growth is being supported by policies that seem unsustainable over the long term.” IMF warned that “these concerns raise the urgency for policymakers to act.” For the US, IMF said “growth will decline once parts of its fiscal stimulus go into reverse.” Also, US forecasts were downgraded “owing to the recently enacted tariffs on a wide range of imports from China and China’s retaliation”, At the same time, China’s 2019 forecasts was also marked down. IMF also warned that “domestic Chinese policies are likely to prevent an even larger growth decline than the one we project, but at the cost of prolonging internal financial imbalances.”
- Global growth projected at 3.7% (3.9% prior) in 2018, 3.7% (3.9% prior) in 2019.
- US growth projected at 2.9% (2.9% prior) in 2018, 2.5% (2.7% prior) in 2019.
- Eurozone growth projected at 2.0% (2.4% prior) in 2018, 1.9% (2.0% prior) in 2019.
- Germany growth projected at 1.9% (2.5% prior) in 2018, 1.9% (2.0% prior) in 2019.
- Japan growth projected at 1.1% (1.2% prior) in 2018, 0.9% (2.9% prior) in 2019.
- UK growth projected at 1.4% (1.6% prior) in 2018, 1.4% (1.5% prior) in 2019.
- China growth projected at 6.6% (6.6% prior) in 2018, 6.2% (6.4% prior) in 2019.
Current forecasts in October.
Prior forecasts in April.
IMF Blog post: Global Growth Plateaus as Economic Risks Materialize
Full World Economic Outlook, October 2018
