Slowdown In Growth And Downgrade In The Forecast Reflect The Ongoing Fallout From Trade Tensions – IMF
A sharp deceleration of global trade, driven by ongoing trade tensions is slowing the global economy more than earlier projections, according to the latest forecasts of the International Monetary Fund.
Real global economic growth will slow to 3.2% this year, 0.1 percentage point slower than forecast in April, and down from 3.6% last year and 3.8% in 2017, according to the quarterly update to the IMF’s flagship World Economic Outlook, released yesterday.
The slowdown in growth and downgrade in the forecast reflect the ongoing fallout from trade tensions.
Since the IMF’s last round of forecasts in April, three more months of data have confirmed weaker growth in much of the world, while tariffs escalated between the U.S. and China during a two-month breakdown in negotiations.
Global trade has decelerated rapidly during the ongoing trade tensions.
The IMF now projects world trade will grow 2.5% in 2019, a downgrade of nearly a full percentage point in the forecast since April.
Earlier forecasts had anticipated a slowdown, but not this sharp. As recently as 2017, global trade in goods and services was growing at a robust 5.5%.
Global growth is sluggish and precarious, but it does not have to be this way because some of this is self-inflicted, said Gita Gopinath, the IMF’s chief economist.