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Economy

IMF lowers growth outlook for 2019-’20

The International Monetary Fund has downgraded forecasts for global and advanced economies growth for this year and next.

The IMF's latest World Economic Outlook forecast updates its previous projections, released in October.

The global growth forecast for 2019 has been revised downward by 0.2 percentage point, to 3.5%. For 2020, the forecast was revised downward by 0.1 percentage point to 3.6%, vs. October's figures.

The IMF said in its outlook that the changes in part reflect carryover from softer momentum in the second half of last year, including in Germany and Italy. It also relates to weakening financial market sentiment and that a contraction in Turkey is now expected to be deeper than anticipated.

"Risks to global growth tilt to the downside," the IMF wrote on its website. "An escalation of trade tensions beyond those already incorporated in the forecast remains a key source of risk to the outlook. Financial conditions have already tightened since the fall. A range of triggers beyond escalating trade tensions could spark a further deterioration in risk sentiment with adverse growth implications, especially given the high levels of public and private debt. These potential triggers include a "no-deal" withdrawal of the United Kingdom from the European Union and a greater-than-envisaged slowdown in China."

Advanced economies are now projected to grow at 2% in 2019 and 1.7% in 2020, down 0.1 percentage points and unchanged vs. October forecasts. Growth in the U.S. was unchanged at 2.5% and 1.8% for 2019 and 2020 respectively; and for the eurozone, 2019 growth was revised downward by 0.3 percentage points to 1.6% for this year. There was no change to the 2020 projection at 1.7%.

U.K. growth was unchanged at 1.5% for 2019, but revised upward by 0.1 percentage point to 1.6% for 2020.

Emerging markets growth was revised downward by 0.2 percentage points to 4.5% for 2019, and was unchanged for 2020 at 4.9%.

The update is available for download on the IMF website.