IMF lowers outlook for world economy to 3.7% growth

• HDFC
• 24 Oct 2018
• Knowledge Centre

HDFC, Tester

Owing to rising interest rates and the escalating US-China trade spat, a report by the International Monetary Fund (IMF) stated that the global economy will grow at 3.7% this year. This is lower than its earlier forecast of 3.9% in July 2018.

 

Other than the 19 countries that use the euro currency, the outlook for Central and Eastern Europe, Latin America, the Middle East, and Sub-Saharan Africa was also lowered.

 

The report said that the US economy would grow by 2.9% in 2018, but this growth would dip to 2.5 % in the following year. This is expected to be largely owing to the effect of recent tax cuts in the US wearing off, and the effect of the US-China trade war.

 

The forecast for growth for the Chinese economy was kept unchanged for the current year at 6.6%. However, it was lowered to 6.2% for 2019, which would mark the country’s slowest growth since 1990. There was a dampening of the outlook for overall global trade too.

 

The IMF study expects global trade to grow 4.2% this year, down from 5.2% in 2017 and from the 4.8% figure expected in Jul-18.