IMF warns of slowing global growth

Like this, a slowdown in growth is expected in 2019 for 70% of the global economy. Global growth slowed to 3.6% in 2018 and is expected to decline further to reach 3.3% in 2019.

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After the modest start, the Fund expects a recovery in growth in the second half of 2019. This advance is supported by a major adjustment of the monetary policy of the major economies, made possible by the absence of inflationary pressures. that growth is at a level close to potential. The US Federal Reserve, the European Central Bank, the Bank of Japan and the Bank of England have adopted a more accommodative monetary policy. China has stepped up its fiscal and monetary stimulus to counteract the negative effect of tariffs. In addition, the prospects for trade tensions between the United States and China have improved as the prospects for a trade agreement materialize.

However, the economist acknowledged that "Industrial production and investment are still weak at the moment in many advanced and emerging market economies, and global trade has not resumed yet."

With Better prospects for the second half of 2019, global growth is expected to return to 3.6% in 2020. However, for the Fund, this "Recovery is precarious" and is based on a rebound in emerging market economies and developing economies, where growth is expected to rise from 4.4% in 2019 to 4.8% in 2020. Specifically, it is based on an expected rebound in growth in Argentina and in Turkey.

Beyond 2020, global expansion is expected to stabilize around 3.5%, mainly due to growth in China and India and its growing weight in global revenues. The increase in activity in emerging markets and developing economies will stabilize at 5%, with emerging Asia recording higher growth than other regions.

The risks

While the global economy continues to grow at a reasonable pace and that a global recession is not part of the baseline projections, "there are many downside risks," according to Gopinath.

One of the dangers is that tensions in trade policy could reappear and develop in other areas (such as the automotive industry), with major disruptions in supply chains. world. Growth in economies such as the Eurozone and China may surprise the downside and the risks badociated with Brexit continue to grow. Similarly, a deterioration in market confidence could quickly tighten financing conditions in a highly indebted environment in both the public and private sectors in many countries.