IMF Forecasts Global Growth at 3.9% in 2018-2019

Forex News

The International Monetary Fund said that global economic growth will be stable in the future, with a support of stronger US trade and fiscal stimulus, while higher tariffs may damage confidence and market growth. The IMF kept its forecasts unchanged for Japan, China, India, Russia and Mexico. Forecasts were cut slightly for Canada, the Middle East and North African countries, as well as a number of low-income developing countries.

Forecasts for global growth in 2018 and 2019 were maintained unchanged at 3.9%. The IMF raised its US growth forecast by 0.2 percentage point for both years, to 2.9% for 2018 and 2.7% for 2019. According to the IMF, lower US corporate income tax rates and accelerated investments due to a temporary tax break would boost US growth through 2020, but these effects would then reverse quickly, causing a slowdown.

The International Monetary Fund also claimed, that risks to the global growth forecasts were broadly balanced for the next few quarters, with the potential for stronger business profits to increase hiring and investments that could boost productivity. But trade tensions, such as the United States and China's recent dueling tariff announcements, could take a direct toll on trade and economic activity and also cause financial market turmoil that would influence financial conditions and hurt confidence.