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7/23/2019

IMF Released Updated WEO

Global growth is forecast at 3.2 percent in 2019, picking up to 3.5 percent in 2020. These projections are 0.1 percentage point lower than in the April WEO projections for both years...

International Monetary Fund (IMF) released the updated version of World Economic Outlook (WEO). The Report says that the global growth is forecast at 3.2 percent in 2019, picking up to 3.5 percent in 2020. These projections are 0.1 percentage point lower than in the April WEO projections for both years.

Important statements from the WEO are as follows;

- Since the April World Economic Outlook (WEO) report, the United States further increased tariffs on certain Chinese imports and China retaliated by raising tariffs on a subset of US imports. 

- Global trade, which is intensive in machinery and consumer durables, remains sluggish. 

- Risks to the forecast are mainly to the downside. They include further trade and technology tensions that dent sentiment and slow investment.

- Multilateral and national policy actions are vital to place global growth on a stronger footing. The pressing needs include reducing trade and technology tensions and expeditiously resolving uncertainty around trade agreements.

- For advanced economies, growth is projected at 1.9 percent in 2019 and 1.7 percent in 2020. 
- In the United States, 2019 growth is expected to be 2.6 percent (0.3 percentage point higher than in the April WEO), moderating to 1.9 percent in 2020 as the fiscal stimulus unwinds.

- Growth in the euro area is projected at 1.3 percent in 2019 and 1.6 percent in 2020

- Emerging and developing Asia is expected to grow at 6.2 percent in 2019–20. The forecast is 0.1 percentage point lower than in the April WEO for both years, largely reflecting the impact of tariffs on trade and investment.

- The subdued outlook for emerging and developing Europe in 2019 largely reflects prospects for Turkey, where—after a growth surprise in the first quarter from stronger-than-expected fiscal support—the contraction in activity associated with needed policy adjustments is projected to resume.  The region is expected to grow at 1 percent in 2019 (0.2 percentage point higher than in the April WEO, buoyed by robust first quarter growth). Growth is expected to improve to 2.3 percent in 2020 (0.5 percentage point lower than in the April WEO, largely reflecting the projected growth slowdown for the remainder of 2019 in Turkey).