–Canada Growth Forecast Stable at +1.5%/’19; UK +1.2%
–China Growth Cut a Tenth to 6.1%
WASHINGTON (MaceNews) – Despite central bank accommodation in Europe and the United States, the International Monetary Fund’s latest World Economic Outlook released Tuesday cut projected global growth by another two tenths to 3.0% for this year.
The Euro area’s growth projection lost a tenth at 1.2%. and China’s also was a tenth lower than July at 6.1%. The UK and Canada’s rates were improved.
The WEO was composed prior to last week’s trade truce between the U.S. and China which prevented an increase in the tariff rate that was due to be imposed Tuesday, and before U.S. sanctions were threatened against Turkey’s economy.
The WEO did not identify the growing amount of debt with negative interest rates as a particular threat, with a reference to them helping financing costs.
“The global economy is in a synchronized slowdown,” the WEO’s main author, IMF chief economist Gina Gopinath wrote, with global growth “at its slowest pace since the global financial crisis.”
While world growth is seen ticking up somewhat next year that prospect is “precarious” and limited to emerging and developing economies. The growth in advanced economies is slowing to 1.7% this year and next.
ome of the losses in the U.S. and China are blamed on their trade dispute, some on the spillover effect of the slowness in China that is happening aside from international trade.
For other reasons, like enhanced more expensive emission standards the global auto industry is contracting, the WEO noted, and trade volume overall is only expanding by 1%, the least since 2012.
“Some of the biggest downward revisions for growth are for advanced economies in Asia,” she wrote. That includes Hong Kong, Korea and Singapore. A common factor is their “exposure to slowing growth in China and spillovers from the U.S.-China trade dispute.”
If growth were to further deteriorate, the WEO warns as did Managing Director Kristalina Georgieva in her debut speech that “an internationally coordinated fiscal response, tailored to country circumstances, may be required.”