IMF lowers World Economic Outlook

THE International Monetary Fund has lowered its World Economic Outlook, projecting the world's economy will expand 3.5 per cent for 2019, and 3.6 per cent in 2020. This is 0.2 and 0.1 per cent lower than last October's forecast, respectively. The newest downward projections were announced today and continue the trend from last October when they were lowered partly because of the negative effects of tariff increases enacted against China by the United States.

In a media release yesterday, the IMF said "risks to global growth tilt to the downside," in part because of an escalation of trade tensions beyond those already incorporated in the forecast.

Financial conditions have tightened since then and a range of triggers beyond trade tensions could spark further deterioration in risk sentiment, leading to adverse growth implications. Among these triggers are a “no-deal” withdrawal of the United Kingdom from the European Union and a greater-than-envisaged slowdown in China.

The IMF said the main shared policy priority for countries is to resolve, cooperatively and quickly, their trade disagreements and the resulting policy uncertainty, rather than raising "harmful barriers" further and destabilising an already slowing global economy. "Across all economies, measures to boost potential output growth, enhance inclusiveness, and strengthen fiscal and financial buffers in an environment of high debt burdens and tighter financial conditions are imperatives," the IMF said.

For Latin America and the Caribbean, the fund lowered its outlook by for 2019 to two per cent and 2020, to 2.5 per cent, both by a 0.2 percentage drop. The latest growth projection for TT (as at September 2018), is 0.9 per cent for 2019, and 1.6 per cent in 2020.