World growth: IMF serious warning

31st October 2019
-News, IAM

Hugues Chevalier, Economist

The IMF has presented last week its economic outlook for the world economy (2019 and 2020). It has been revised a 0.3 percentage point downgrade from the April 2019, at 3%, and should slightly rebound in 2020 at 3.4% (-0.2 against April outlook). This is the lowest economic growth for the last 10 years. As the IMF outlined “At 3 percent growth, there is no room for policy mistakes and an urgent need for policymakers to cooperatively deescalate trade and geopolitical tensions” because “Trade barriers and heightened geopolitical tensions, including Brexit-related risks, could further disrupt supply chains and hamper confidence, investment, and growth”. According to the IMF calculations, the trade war initiated by the USA will cost 0.8 point of GDP next year to the wold economy. For the advanced economies, GDP growth would reach a low 1.7% in both this year and 2020, because of the contraction of the world trade and industrial production. As during the last years, the only dynamism will again come from the south East Asian countries.

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