WASHINGTON: The IMF has lowered its global growth projections for 2019 and 2020 to 3.5 per cent and 3.6 per cent respectively, citing slowdown in several advanced economies around the world more rapidly than previously anticipated.
The revised global growth rates are 0.2 and 0.1 percentage point below the International Monetary Fund’s previous projections made three months ago.
“Global growth in 2018 is estimated to be 3.7 per cent, as it was last fall, but signs of a slowdown in the second half of 2018 have led to downward revisions for several economies. Weakness in the second half of 2018 will carry over to coming quarters, with global growth projected to decline to 3.5 per cent in 2019 before picking up slightly to 3.6 per cent in 2020, the IMF said in its World Economic Outlook (WEO) update.
This growth pattern, it said, reflects a persistent decline in the growth rate of advanced economies from above-trend levels occurring more rapidly than previously anticipated together with a temporary decline in the growth rate for emerging market and developing economies in 2019, reflecting contractions in Argentina and Turkey, as well as the impact of trade actions on China and other Asian economies.
IMF Chief Economist Gita Gopinath said global growth is weakening at a faster than expected pace and the risks have escalated.
The Indian-American economist, who joined the IMF this month, also said political risks are very important and leaders must act immediately to check any unhappiness over growing challenges.
In advanced economies, growth, is projected to slow from an estimated 2.3 per cent in 2018 to 2.0 per cent in 2019 and 1.7 per cent in 2020. This estimated growth rate for 2018 and the projection for 2019 are 0.1 percentage point lower than in the October 2018 WEO, mostly due to downward revisions for the euro area, it said.
According to the IMF, the global growth forecast for 2019 and 2020 had been revised downward in the last WEO, partly because of the negative effects of tariff increases enacted in the US and China earlier that year. PTI
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