IMF: Global growth projections remain stable; eurozone revised downwards

By Sophie Baker

· July 17, 2018 3:39 PM

While global growth projections remain unchanged, growth in the euro zone has been revised to the decline by the International Monetary Fund

In its latest World Economic Outlook, updating the projections made in April, the IMF left global growth projections for 2018 and 2019 unchanged at 3.9% for each year. However, the IMF has indicated that the rate of expansion appears to have peaked in some major economies as growth becomes less synchronized.

The euro zone in particular has seen its growth forecasts revised downwards, notably France, Germany and Italy. Overall growth in the euro area is expected to be 2.2% in 2018, down 0.2 percentage points from April and 1.9% in 2019, down 0.1 percentage points over the period.

Growth in France in 2018 is expected to fall to 1.8% from a forecast of 2.1% in the April figures; growth in 2019 was also revised down by 0.3 percentage points to 1.7%.

Germany's growth in 2018 is estimated at 2.2%, up from 2.5% in the April update; but the country's growth has been revised upwards to 2.1% for 2019, increasing by 0.1 percentage point.

Italy is expected to grow 1.2% this year, compared to 1.5% in the previous projection; and 1% in 2019, down from 1.1%.

United Kingdom growth in 2018 was also revised down from 1.6% to 1.4% in the previous update. Japan's growth rate was 1%, compared to 1.2% in the April 2018 update, while projections for 2019 remained at 0.9%. The United States is expected to grow by 2.9% in 2018 and 2.7% in 2019.

"Growth projections have been revised downwards for the euro area, Japan and the United Kingdom, reflecting negative surprises for the early 2018 business "the IMF in a statement accompanying the outlook. "Among emerging and developed economies, growth prospects are also becoming more unequal, with rising oil prices, rising yields in the United States, escalating trade tensions and market pressures on the currencies of some fundamentals. "

The IMF added that the risk had further declined, citing US announced and anticipated tariff increases, as well as retaliation from trading partners, "increasing the likelihood of progressive and sustained trade actions. The growth prospects, but by their direct impact on the allocation of resources and productivity and by increasing uncertainty and weighing on investment, said the IMF.

<! – Correction start

Correction end ->