IMF downgrades global growth forecasts to 3.2% in 2019 and 3.5% in 202, down from April projections of 3.3% and 3.6% respectively. The revision for 2019 reflects “negative surprises for growth in emerging market and developing economies that offset positive surprises in some advanced economies”.
The report added, “global growth is sluggish and precarious but it does not have to be this way because some of this is self-inflicted”. “Dynamism in the global economy is being weighed down by prolonged policy uncertainty as trade tensions remain heightened despite the recent US-China trade truce, technology tensions have erupted threatening global technology supply chains, and the prospects of a no-deal Brexit have increased.”
IMF also urged monetary policy to remain “accommodative”, especially “where inflation is softening below target”. Though, it should accompanied by “sound trade policies”. Fiscal policy should “balance growth, equity and sustainability concerns”. Also, ” the need for greater global cooperation is ever urgent”, including resolving trade and technology tensions, climate change, international taxation, corruption, cybersecurity, and digital payment technology.
Looking at some details:
- US growth in 2019 revised up by 0.3% to 2.6%.
- US growth in 2020 unchanged at 1.9%.
- Eurozone growth in 2019 unchanged at 1.3%.
- Eurozone growth in 2020 revised up by 0.1% to 1.6%.
- Germany growth in 2019 revised down by -0.1% to 0.7%.
- Germany growth in 2020 revised up by 0.3% to 1.7%.
- UK growth in 2019 revised up by 0.1% to 1.3%.
- UK growth in 2020 unchanged at 1.4%.
- Japan growth in 2019 revised down by -0.1% to 0.9%.
- Japan growth in 2020 revised down -0.1% to 0.4%.
- China growth in 2019 revised down by -0.1% to 6.2%.
- China growth in 2020 revised down by -0.1% to 6.0%.
