The IMF said Tuesday that it had revised global growth for 2018 and 2019 downward vs. projections at its previous update in July. It projects a 3.7% growth rate for 2018 and 2019, vs. 3.9% for both years as predicted in July.
The 3.7% forecast puts global growth at the same pace as 2017's actual growth rate, said a blog by Maurice Obstfeld, the economic counselor and director of research at the IMF.
"It occurs as many economies have reached or are nearing full employment and as earlier deflationary fears have dissipated. Thus, policymakers still have an excellent opportunity to build resilience and implement growth-enhancing reforms," Mr. Obstfeld wrote.
Mr. Obstfeld said there are also "clouds on the horizon," with growth proving to be less balanced than hoped. Mr. Obstfeld said the likelihood of further negative shocks to the growth forecast has risen, and several key economies' growth is being supported by "policies that seem unsustainable over the long-term," he added.
The U.S. growth projection remained at 2.9% for 2018, but was revised downward to 2.5%, from 2.7% as of July's forecast.
"Growth in the United States, buoyed by a procyclical fiscal package, continues at a robust pace and is driving U.S. interest rates higher. But U.S. growth will decline once parts of its fiscal stimulus go into reverse. Notwithstanding the present demand momentum, we have downgraded our 2019 U.S. growth forecast owing to the recently enacted tariffs on a wide range of imports from China and China's retaliation," Mr. Obstfeld said in the blog.
China's growth was also marked down for 2019 by 0.2 percentage points to 6.2%. It remained at 6.6% for 2018.
Forecasts for emerging markets and developing economies were also revised downward, by 0.2 percentage points for 2018 to 4.7%; and by 0.4 percentage points for 2019 also to 4.7%.
The revisions for emerging markets are geographically diverse, covering Latin America, emerging Europe, South Asia, East Asia, the Middle East and Africa — as well as Nigeria, Kazakhstan, Russia and Saudi Arabia, which will benefit from higher oil prices.
Mr. Obstfeld wrote: "Broadly speaking, however, we see signs of lower investment and manufacturing, coupled with weaker trade growth."
Eurozone growth for 2018 was revised downward by 0.2 percentage points to 2%, but remained at 1.9% for 2019.