According to IMF’s latest Global Economic Outlook, while the Fund made no change to either its 2018 or 2019 global growth forecast of 3.9%, the accompanying statement did highlight that “the expansion is becoming less even, and risks to the outlook are mounting”.
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“They went as far as to say that “the rate of expansion appears to have peaked in some major economies and growth has become less synchronised”. Indeed the country-by-country forecasts highlight the widening divergence between the US and other developed nations.”
“The 2.9% and 2.7% growth forecast for the US in 2018 and 2019 respectively was the same as the April forecast, however the Euro Area was revised down to 2.2% in 2018 and 1.9% in 2019, a downward revision of two-tenths and one-tenth.”
“Japan and the UK were also revised down two-tenths this year to 1.0% and 1.4% respectively although forecasts for next year were left unchanged. There were also no surprises for China (6.6% in 2018 and 6.4% in 2019).”
“Unsurprisingly the looming trade war concerns were cited as the greatest risk with the IMF saying that “the risk that current trade tensions escalate further – with adverse effects on confidence, asset prices, and investment – is the greatest near-term threat to global growth”.”
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