The International Monetary Fund has lowered its growth forecast again in July 2019.
The growth forecast for this year 2019 is at 3.2 percent. In April, the growth forecast was at 3.3 percent.
The growth forecast for the next year is slightly better at 3.5 percent, though it is slightly below the 3.6 percent levels projected earlier.
Meanwhile, in the U.K., the growth forecast by the IMF is at 1.3 percent which is slightly below the projected forecast at 1.2 percent. Pre-market stock accumulation is helping the market price.
The IMF has cited a few factors for dragging down global markets. The chief among them is the trade war between the U.S. and China, on which a mutual trade agreement is still evading the leaders. The U.S. auto tariffs have also hit the economy. Similarly, Brexit is another cause for worry, as the country is not able to find an exit that is beneficial for all.
Chief economist at the IMF Gita Gopinath says that global growth has been affected. But it is more self-inflicted, she says.
The trade war between the U.S. and China has contributed much towards the global slowdown. However, Gopinath puts the entire blame on the U.S. Countries should not make use of these tariffs to pressure others, says the report. It should not serve as a substitute for dialogues or bring bilateral trade balances.
The report states that the interest rates are low in many countries. This is the most appropriate method to follow with the subdued growth in the global economy.
The stimulus from lowering interest rates will gradually fade from the U.S. and this will reduce growth, says the IMF report. Growth last year was at 2.9 percent, but it is predicted to be 1.9 percent in 2020.
Turkey, Iran, Venezuela, and Argentina are a few stressed economies that have scope for improvement, says the report.
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