Analysts at Deutsche Bank note that the IMF slashed the global growth forecast for 2018 and 2019 to 3.7% from 3.9% earlier while keeping the US growth forecast for 2018 unchanged at 2.9% and reducing the 2019 growth forecast for US by 0.2pp to 2.5% citing the trade conflict.
Key Quotes
“The IMF also sounded the alert on the global trade war saying it could take a significant bite out of global growth estimating output could fall by more than 0.8% in 2020 and remain 0.4% below its trend line over the long term, in a scenario where US President Trump follows through on all his threats, including global duties on cars.”
“IMF estimates output could fall by more than 1.6% in China and over 0.9% in the U.S. next year, in such a case. Elsewhere the IMF upped the inflation forecast for the Venezuelan economy in 2018 to 1.37 million percent by the end of the year from its earlier forecast of 1 million percent. Impressive numbers.”
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