Daily Management Review

IMF predicts slowdown in global growth in the near future


04/18/2018


Soft monetary policy in the EU and budget stimulation in the US and China will be supporting high growth rates of the world economy for another two years. Since 2020, the growth rate will begin to slow down, the International Monetary Fund (IMF) forecasts in its April review.



Ian Muttoo
Ian Muttoo
Forecast of global economic growth of the IMF has not changed compared to the January estimate - 3.9% in 2018 and 2019 (by 0.1 percentage points (pp) higher than in 2017). Growth in advanced economies in the next two years will be higher than the potential, due to the current level of labor productivity and capital. "It is expected that the euro zone countries will reduce excess capacity, which will contribute to a soft monetary policy and the US expansive fiscal policy to improve the economy above the full employment level", - the paper states. The 2019 rate remained unchanged (2.2%) compared with the previous forecast. recall, it assumed that the GDP of the developed countries will grow in 2018 by 0.2 p.p. (2.5%) thanks to the US, EU and UK.

The IMF has slightly worsened the outlook for Canada, the Middle East and North Africa, and a number of low-income developing countries. At the same time, the dynamics of the GDP of emerging market and developing countries has not been revised for 2018 (4.9%). For 2019, it has been slightly improved - from 5% to 5.1% - thanks to a faster than expected recovery of the Brazilian economy on the background of rising prices for exchange commodities.

The fund also expects that oil prices in 2018-2019 will fluctuate around $ 60 per barrel (in 2018 - $ 62.3, in 2019 - $ 58.2 per barrel).

It should be noted that the acceleration of the world economy growth, according to the IMF, will not be long. Already two years after eliminating the production gap, most advanced economies are likely to return to potential growth rates well below the pre-crisis average levels. The reason is aging of population and sluggish productivity growth. The US will have to replace the stimulus fiscal policy with a restrictive one, the fund believes. The IMF also calls "unsatisfactory" the expected growth rates in some emerging markets and developing countries, including commodity exporters (such as Brazil and Russia). They are invited to implement significant fiscal consolidation. "The risks of exceeding and falling short of the forecast of growth in the short term are generally balanced, but the risks after several quarters are clearly shifted in the direction of reducing growth," the fund's economists conclude.

source: imf.org






Science & Technology

Fast Company: Apple isn't the most innovative anymore

U.S. Space Program Could Be Delayed Due To SpaceX, Boeing Design Risks: Reuters

What trends will be affecting the health sector in the coming years?

Deloitte identifies main cyber threats for power industry

Zenuity To Take Self Driving Car Road Test In Sweden With Permission

Researchers: Half of Facebook users is fake

Amazon’s Ring gets in a privacy scandal

Facebook Is Creating A Stablecoin For Its WhatsApp Users

IBM offers to use the first quantum computer

Passport Numbers Of 5 Million Customers Hacked: Concedes Marriott

World Politics

World & Politics

AirHelp expects up to 33 th of cancellations and flight delays per day all over the world in 2019

Far-right and Catalonia: New elections in Spain

Trump is losing rating because of shutdown

Hanoi, Vietnam Chosen As Place For 2nd Summit Between Trump And Kim Jong-Un

US, China to hold new negotiations in Beijing

Human Rights Not To Be Dissociated From Stability, Macron Tells Sisi

Brexit Hijack Is Not The Parliament’s Right

Macedonia ignites political crisis in Greece