IMF cuts global growth amid trade tensions

The International Monetary Fund (IMF) has cut its growth forecasts for the global economy for 2019 and 2020.

It predicted growth of 3.2 per cent in 2019, down from its April forecast of 3.3 per cent. Growth next year is set to pick up to 3.5 per cent next year, although that is below its earlier forecast of 3.6 per cent.

In its World Economic Outlook report for July, the Fund said growth “remains subdued” noting that there is an urgent need to reduce trade and technology tensions.

The revision for 2019 reflects negative surprises for growth in emerging market and developing economies that offset positive surprises in some advanced economies.

Growth is projected to improve between 2019 and 2020. However, close to 70 percent of the increase relies on an improvement in the growth performance in stressed emerging market and developing economies and is therefore subject to high uncertainty.

In sub-Saharan Africa, growth is expected at 3.4 percent in 2019 and 3.6 percent in 2020, 0.1 percentage point lower for both years than in the April WEO, as strong growth in many non-resource-intensive countries partially offsets the lackluster performance of the region’s largest economies.

“Higher, albeit volatile, oil prices have supported the outlook for Angola, Nigeria, and other oil-exporting countries in the regionBut growth in South Africa is expected at a more subdued pace in 2019 than projected in the April WEO following a very weak first quarter, reflecting a larger-than-anticipated impact of strike activity and energy supply issues in mining and weak agricultural production,” the report said.

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