IMF Cuts 2018 World Growth Outlook, Ups Japan's Forecast

Nusa Dua, Indonesia, Oct. 9 (Jiji Press)--The International Monetary Fund on Tuesday lowered its growth outlook for the global economy for this year to 3.7 pct, while raising its projection for Japan to 1.1 pct. The IMF cut its global growth forecast by 0.2 percentage point from its previous outlook released in July, making a downward revision for the first time in around two years since July 2016. In its latest World Economic Outlook report, the international body said that "rising trade barriers and a reversal of capital flows to emerging market economies with weaker fundamentals and higher political risk have become more pronounced or have partially materialized." "Downside risks to global growth have risen in the past six months and the potential for upside surprises has receded," it said. For 2019, the IMF lowered its global growth projection by 0.2 point to 3.7 pct, warning that the growth "appears to have plateaued." Japan's outlook for 2018 was pulled up from 1.0 pct forecasted in the July report, thanks to robust business investment in April-June. But the projection for 2019 was maintained at 0.9 pct. For the U.S. economy, the IMF kept its growth forecast for 2018 unchanged at 2.9 pct, anticipating a sustained economic boom backed by tax cuts. Its 2019 prediction for the country was lowered, however, by 0.2 point to 2.5 pct, as the organization expects a prolonged trade row with China to become an obstacle to investment in the United States. The IMF cut its eurozone growth projection for 2018 by 0.2 point to 2.0 pct amid an economic slowdown in Germany. The organization reduced its 2019 growth forecast for China by 0.2 point to 6.2 pct, predicting a blow from massive U.S. tariffs. It expects the economy to stay sluggish in Argentina and Turkey, both recently hit by currency plunges. The IMF estimates that the escalation of the U.S.-China trade conflict will push down the growth rate of the global economy by 0.4 point in the long run. END