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IMF maintains outlook for world economy, cuts U.S., UK forecast

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Staff Writer | Monday July 24, 2017 4:13AM ET
World economy
World economy   The recovery in global growth

The International Monetary Fund (IMF) is leaving its projections for global output growth unchanged at 3.5% this year and 3.6% in 2018, according to Monday's quarterly update of the IMF's forecast.


"The recovery in global growth that we projected in April is on a firmer footing," said Maurice Obstfeld, chief economist at the Washington-based crisis lender.

"There is now no question mark over the world economy's gain in momentum."

Recent data including faster growth in trade suggested that the world economy was entering its "broadest synchronized upswing" of the last decade, he said.

The IMF projects global trade growth approaching 4% in 2017-18, outpacing the world economy and well ahead of the 2015-16 trade growth of less than 2.5%.

In the revision issued from Kuala Lumpur of its World Economic Outlook, the IMF raised its forecasts across the eurozone, as well as for emerging and developing Europe, China and Canada.

The most important lowered outlook was for the US, where the IMF slashed its expectations for expansionary federal budget policies, as President Donald Trump's plans for tax cuts and infrastructure projects have yet to gain traction in Congress.

The revised IMF forecast is for US output to expand by 2.1% this year and next; three months ago, the outlook for 2017-18 was 2.4%.

The IMF significantly pared its expectations through 2018 for Saudi Arabia, Brazil and the UK.

 

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