International Monetary Fund cuts global economic growth target to 3.7%

International Monetary Fund cuts global economic growth target to 3.7%

International Monetary Fund cuts global economic growth target to 3.7%

In its latest "World Economic Outlook", (WEO) the IMF's has predicted that the global economy will grow by 3.7% in 2018, down from the 3.9% it predicted in April 2018.

In its latest World Economic Outlook report, the International Monetary Fund conducted a series of calculations of the impact from the trade tariffs that the administration of US President Donald Trump has already implemented and has threatened to impose, as well as reprisals from China and other nations. It cited USA tariffs on solar panels, washing machines, steel and aluminum, in addition to retaliation by trade partners, as potentially depressing factors.

"Trade policy reflects politics and politics remains unsettled in several countries, posing further risks", Obstfeld said.

When the world's two biggest economies are "at odds", that is going to create "a situation where everyone is going to suffer", Obstfeld said. The IMF has also revised down its forecast for Indonesia's growth.

Last month, the Swiss government, raised its GDP forecast for 2018 to 2.9% from 2.4% and, earlier this year, it was announced that Swiss exports had matched and surpassed their recent growth.

He said the talks would be held for "such a programme, a stabilisation, a recovery programme, on which basis we could overcome this financial crisis".

Obstfeld, who retires from the International Monetary Fund later this year, said there were bright spots, with some Latin American and African nations getting growth forecast upgrades.

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The IMF said Tuesday it projects continued growth in the United States, but at a slower pace next year.

It urged the government to relax controls on its currency and to do more to help the poor to help lay the foundations for sustainable growth. That could result in higher-than-expected interest rates from the Federal Reserve and stock market uncertainty.

"Turmoil already seen in some emerging market economies could worsen, with negative spillovers to Asia through reduced capital flows and higher funding costs", it said.

Global growth is expected to remain steady at 3.7 per cent in 2020, as the decline in advanced economy growth with the unwinding of the USA fiscal stimulus and the fading of the favorable spillovers from United States demand to trading partners is offset by a pickup in emerging market and developing economy growth. "In Nigeria, inflation is projected to fall to 12.4 percent in 2018, from 16.5 percent in 2017, and to rise to 13.5 percent in 2019", the report read.

However the U.S., one of the IMF's biggest donors, has raised fears Pakistan could use any bailout money to repay mounting loans from China, sparking criticism from Islamabad.

The IMF projects average annual inflation will pick up to 2.8 percent in 2018 and to 3.3 percent in 2019, climbing over the National Bank of Hungary's 3.0 percent mid-term target.

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