IMF downgrades forecast for economic growth

Industry News | | MIC Customs Solutions |

The IMF has released some gloomy figures on the world economy.

The International Monetary Fund (IMF) has released its latest World Economic Outlook, which downgrades the global forecast and warns there may be no end in sight for the current turmoil.

In its report, the organisation said global growth for 2019 is likely to be just 2.9 per cent. This is lower than the previous prediction of three per cent and the worst figure seen since the global financial crisis.

However, the forecast also suggests global growth could increase to 3.3 per cent in 2020 and then 3.4 per cent in 2021.

The new figures are a far cry from the global economic growth of 3.8 per cent seen in 2017, while the rate was 5.5 per cent prior to the global financial crisis in 2006.

Interestingly, the document suggests the UK could be the fastest-growing economy in the G7 this year and next, with predictions set for 1.4 and 1.5 per cent respectively.

IMF chief economist Gita Gopinath said the overall outlook is largely down to disappointing growth in India recently, with the Asian nation potentially experiencing its worst year since 2013.

She also warned the economy is becoming more vulnerable to climate-related emergencies and urged governments to reduce their carbon emissions, as well as building greener infrastructure.

Criticism also fell on the US and Iran for their political wrangling and its effect on the Middle East's economy.

"The projected recovery for global growth remains uncertain. It continues to rely on recoveries in stressed and underperforming emerging market economies," Ms Gopinath concluded.

According to the IMF, a "coordinated fiscal response" may be necessary to prevent future recessions.

"There is simply no room for complacency, and the world needs stronger multilateral cooperation and national-level policies to support a sustained recovery that benefits all," it added.

The news comes as leaders from around the world gather in Davos, Switzerland for the World Economic Forum to discuss a host of issues affecting trade. 

This will no doubt include the Sino-US trade wars, after Donald Trump signed a deal with Beijing last week designed to ease tensions.