The world’s economic growth squirt is almost at an end, the International Monetary Fund (IMF) warned as it slashed growth forecasts for most of the developed economies. Growth is slowing in euro area, Japan and the United Kingdom, the IMF said, in an update of its world economic outlook.
The IMF continued to project global growth rates of 3.9 for this year and 2019, but said this strong growth is “less even, more fragile [and] under threat.”
“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,” said Maury Obstfeld, the IMF’s chief economist, in a statement.
IMF estimated, global output could be 0.5% below current projections by 2020, if current trade threats are realized.
The U.S. is “especially vulnerable” because it may find a relatively high share of its exports taxed in global markets, the report concluded. The IMF kept its U.S. growth forecast of 2.9% for this year and 2.7% growth in 2019.
The IMF cut its euro-area forecast by 0.2 points to 202% GDP growth in 2018 and by 0.1 point to 1.9% in 2019. It trimmed its growth outlook for Germany, France and Italy for the next two years.