BSS-52 IMF lowers global growth outlook to 3.7pc

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BSS-52

IMF-WORLD-ECONOMY

IMF lowers global growth outlook to 3.7pc

DHAKA, Oct 9, 2018 (BSS) – The International Monetary Fund (IMF) has
projected 3.7 percent global economic growth for fiscal 2018-19, which is 0.2
percent lower than its previous forecast in April.

IMF released the new report in the Indonesian resort island of Bali today
where the IMF and World Bank annual meetings are set to be held.

The report says momentum is still strong as fiscal stimulus continues to
increase in the United States, but the forecast for 2019 has been revised
down due to recently announced trade measures, including the tariff imposed
on US$ 200 billion import of the US from China.

The downgrade reflects a confluence of factors, including the introduction
of import tariff between the United States and China, weaker performances by
eurozone countries, Britain and Japan, and rising interest rates that are
pressuring some emerging markets with capital outflows, notably Argentina,
Brazil, Turkey, South Africa, Indonesia and Mexico.

In a statement, IMF chief economist Maurice Obstfeld said: “Notwithstanding
the present demand momentum, we have downgraded our 2019 US growth forecast
owing to the recently enacted tariffs on a wide range of imports from China
and China’s retaliation.”

“Last April, at the time of our last World Economic Outlook, the world
economy’s broad-based momentum led us to project a 3.9 percent growth rate
for both this year and next.”

Considering developments since then, however, Obstfeld said, that number
now appears overoptimistic.

The IMF chief economist said: “China’s expected 2019 growth is also marked
down. Domestic Chinese policies are likely to prevent an even larger growth
decline than the one we project, but at the cost of prolonging internal
financial imbalances”.

Overall, compared with six months ago, projected 2018-2019 growth in
advanced economies is 0.1 percentage point lower, including downgrades for
the euro area, the United Kingdom, and Korea, he said.

Obstfeld said the negative revisions for emerging market and developing
economies are more severe, at minus 0.2 and minus 0.4 percentage point
respectively for this year and next year.

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