IMF revised down global growth forecasts and warned that “the global expansion is weakening and at a rate that is somewhat faster than expected.” Also, ” risks to more significant downward corrections are rising.”

And, “while financial markets in advanced economies appeared to be decoupled from trade tensions for much of 2018, the two have become intertwined more recently, tightening financial conditions and escalating the risks to global growth.”

In particular, IMF warned that “an escalation of trade tensions and a worsening of financial conditions are key sources of risk to the outlook.” Meanwhile, China’s slowdown could be worsened by trade tensions and trigger “abrupt sell-offs in financial and commodity markets”. “Brexit cliffhanger”, “financial risk in Italy¬†” and “protracted US federal government shutdown” are other risks.

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To summarize, for 2019:

  • Global growth is projected at 3.5%, down from prior 3.7% (October forecast).
  • US growth is projected at 2.5%, unrevised.
  • Eurozone growth is projected at 1.6%, down from prior 1.9%.
  • Japan growth is projected at 1.1%, up from prior 0.9%
  • China growth is projected at 6.2%, unrevised.

Full release here.


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