International Monetary Fund cuts global economic growth target to 3.7%

Lloyd Doyle
October 11, 2018

They show that a burst of strong growth, fueled partly by USA tax cuts and rising demand for imports, was starting to wane.

He contended that China had "already retaliated" against his tariff increases.

The IMF said a new data base in its semi-annual Fiscal Monitor report showed considerable net worth in 31 countries that account for 61 per cent of global economic output. Nigeria's growth is projected to increase from 0.8 per cent in 2017 to 1.9 per cent in 2018 and 2.3 per cent in 2019 (0.4 percentage point higher than in the April 2018 WEO for 2019), buoyed by the impact of recovering oil production and prices.

China's growth is still expected to be more than 6% next year, but the IMF's chief economist Maurice Obstfeld warned Beijing to concentrate on quality and sustainability of growth, not quantity of growth.

Germany, the economic powerhouse of Europe, could be particularly hard hit by a drop in manufacturing orders and trade volumes. For 2018/19, the real economic growth was expected to moderate, but still, the International Monetary Fund expected Iran's economy to grow by 4 percent in 2018/19, forecasting stable oil production in line with the OPEC cap on Iran's production. "Poverty will lead to an increasing crime rate and the tall claims of 10 million jobs and five million house would not materialize", Wizarat warned.

At the top of the list are worries about emerging economies, especially Argentina and Turkey, two countries with heavy external debt that have had to raise interest rates sharply in recent months.

"But there is no denying that the susceptibility to large global shocks has risen", Obstfeld said.


This is down from its July forecast of 3.9 percent growth for both years.

It also said inflation in India is on the rise, estimated at 3.6 per cent in fiscal year 2017/18 and projected at 4.7 per cent in fiscal year 2018/19, compared with 4.5 per cent in fiscal year 2016/17, amid accelerating demand and rising fuel prices.

Russian Federation was among the few energy-rich emerging market countries whose growth forecasts were bumped up.

The fund left its 2018 U.S. forecast unchanged but cut its expectation for next year, citing the impact of the trade conflict.

"Where we are now is we've gotten some bad news". USA equities have risen "well beyond" the valuations they enjoyed before the global financial crisis, the International Monetary Fund said. China was the fastest-growing economy in 2017. It estimates global output could fall by more than 0.8 per cent in 2020 and remain 0.4 per cent 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.

The effects on the United States and China would be particularly severe, with 2019 GDP losses of more than 0.9% in the USA and 1.6% in China in 2019. In September, Trump imposed tariffs on almost $200 billion of Chinese imports, with China responding with higher tariffs on about $60 billion of USA imports.

Other reports by Iphone Fresh

Discuss This Article

FOLLOW OUR NEWSPAPER