IMF attributes the slight downwards revision to a sharper-than-expected anticipated slowdown in India
- Sees tentative signs that manufacturing and global trade are bottoming out
- That is partially due to the US-China trade deal
- Sees risks less tilted to the downside than in October
- US-Iran tensions, social unrest and a flare-up in trade tensions are key concerns
- 2021 global growth forecast seen at 3.4% (3.6% previously)
- US 2020 growth forecast seen at 2.0% (2.1% previously)
- China 2020 growth forecast seen at 6.0% (5.8% previously)
- Euro area 2020 growth forecast seen at 1.3% (1.4% previously)
- UK 2020 growth forecast seen at 1.4% (unchanged)
- India 2020 growth forecast seen at 5.8% (7.0% previously)
The biggest change of the lot comes from India as IMF notes that a decline in credit conditions is expected to see domestic demand slow down sharply. Meanwhile, they revise higher China’s growth forecast this year amid some cancellation in tariffs from the trade deal.
Overall, the report points to more optimistic sentiment surrounding global growth – they talk about the global slowdown likely to reach its nadir – but there are still cautionary signs to be aware about. The full report can be found here.
As things stand, any strong rebound in global trade especially isn’t likely to materialise any time soon and that should keep global growth tepid in the year ahead.
The slowdown may be starting to bottom out but any imminent recovery in global economic conditions is still some way off and the 2021 projection (3.4%) reaffirms that view.