The International Monetary Fund (IMF) is forecasting sluggish global economic growth in the year ahead.
In a new report, the Washington, D.C.-based IMF said global growth appears to have bottomed out but there is no rebound in sight and risks ranging from trade tensions to climate shocks makes the outlook even more uncertain.
For 2020 and 2021, the IMF scaled back its global growth forecasts, mostly due to a sharper-than-expected slowdown in India and other emerging markets, even as it said that a U.S.-China trade deal added to hopes the activity was bottoming out.
With trade wars weighing on exports and investment, the global economy expanded by 2.9% in 2019, its slowest pace since the global financial crisis, despite near synchronized central bank easing that added half a percentage point to overall global growth.
The IMF now sees growth at 3.3% this year, below its October projection of 3.4% and also cut the 2021 forecast to 3.4% from 3.6%. The reductions reflect the IMF’s reassessment of economic prospects for a number of major emerging markets, notably India, where domestic demand has slowed more sharply than expected.
The IMF also said it marked down growth forecasts for Chile due to social unrest and for Mexico, due to a continued weakness in investment.
The Fund said that an easing of tensions between the United States and China, which had stunted GDP growth in 2019, had boosted market sentiment, amid preliminary signs that trade and manufacturing were bottoming out.
