IMF cuts projection on global growth; blames trade tensions

Washington, Oct 9: The International Monetary Fund (IMF) has cut its growth forecast for the world economy for the first time in more than two years and held the rising trade disputes and tensions in the emerging markets, Bloomberg reported.

The IMF on Tuesday, October 9, projected a global rise of 3.7 per cent this year, which is 0.2 points less than the projection which was made three months earlier. It was in fact the first downgrade since July 2016, the report added. The IMF's latest projection came on the eve of its annual meetings in Bali in Indonesia.

The Bloomberg report said while the global economy is still doing well to match its record achieved last year (the strongest since 2011), the new projections suggested that "fatigue is setting in and the overall performance masked mounting weakness in emerging markets from Brazil to Turkey."

The body though did not alter the US forecasts for 2018 but reduced its expectation for the next year, thanks to the trade disputes.

"The outlook is one of less balanced and more tentative expansion than we hoped for last April," IMF Chief Economist Maurice Obstfeld was quoted as saying.

"There are clouds on the horizon. Growth has proven to be less balanced than we had hoped," he said.

{document1}