Daily Management Review

Global Growth Forecast Cut By IMF Ahead Of Davos


Global Growth Forecast Cut By IMF Ahead Of Davos
The global economy will witness a sluggish recovery in 2-020 even though it is on a recovery path, said the International Monetary Fund (IMF).
Its global economic growth forecast for 2020 has been lowered by the IMF by 0.1 per cent to 3.3 per cent compared to its predictions made in October, the IMF said in its latest update to its World Economic Outlook on Monday.
Despite the downgrading, the IMF forecast for 2020 is still more than the growth of the global economy in 2019 when it grew by 2.9 per cent. This report from the IMF is expected to be a talking point at the annual World Economic Forum in Davos, Switzerland.
There are positive trends in international trade and industrial output as suggested by the data, said IMF managing director Kristalina Georgieva while presenting the revised numbers in Davos. "After a synchronized slowdown in 2019, we expect a moderate pickup in global growth this year and next," Georgieva told a news conference.
However, factors such as the ongoing trade war between Washington and Beijing, the recent tensions between the US and Iran and the political protests in numerous countries still makes growth prospects of 2020 vulnerable, warned the IMF chief.
"We are all adjusting to live with the new normal of higher uncertainty," she said. "We are already seeing some tentative signs of stabilization but we have not reached a turning point yet."
The projections for the global economy depended on "avoiding further escalation" in an ongoing "unresolved" economic dispute between the US and China, the IMF said.
"Trade truce is not the same as trade peace," Georgieva Friday, commenting on the so called phase one trade deal between the United States and China last week which has eased trade related tensions between the two largest economies of the world even though tow thirds of the goods imported from China into the US still face import tariffs.
"Policy missteps at this stage would further enfeeble an already weak global economy," the IMF said in the quarterly report.
One of the important reasons for the downward revision of global growth is the a projected slowdown in India. The Indian slowdown "accounts for the lion's share of the downward revisions," the IMF said.
Delays in making structural reforms, budget deficits and declining consumption and investments are the issues with the Indian economy and its slowdown, Georgieva said.