IMF downgrades global trade forecast

Industry News | 30 July 2019

The IMF has revised its trade forecast downwards.


The International Monetary Fund (IMF) has revised down its trade growth forecast for the rest of the year, citing a range of different factors.

In a new World Economic Outlook release, it has now said global economic growth will decline to 3.2 per cent in 2019, 0.1 per cent slower than originally predicted in April.

The figure is also considerably down on the 3.6 per cent seen last year, with the IMF blaming a sharp deceleration in global trade and continuing trade tensions.

Indeed, global trade has been suffering since the advent of trade wars such as those between the US and China.

The IMF now predicts world trade will only grow by 2.5 per cent this year, almost a full percentage point below the forecast made in April.

In an interview with the Wall Street Journal, IMF chief economist Gita Gopinath said: "Dynamism in the global economy is being weighed down by prolonged policy uncertainty as trade tensions remain heightened, despite the recent US-China trade truce."

The expert also warned tensions over technology companies - potentially including the fallout over tariffs between Japan and South Korea, as well as the dispute between Huawei and the US - and the ongoing potential for a chaotic Brexit are other factors contributing risk to the economy.

This news comes after a separate report from the World Trade Organization said trade restrictions have been applied to some $340 billion of trade since last October.

It is undoubtedly having an effect on how easy it is to get products moved from one country to another, with some businesses potentially being put off trading internationally as a result.