While risks have eased, the IMF was clear that that there’s still plenty to worry about. Progress in trade talks is stop-start, simmering U.S.-Iran tensions could hit oil supply, and there’s also social unrest and weather-related disasters.
“The risk of protracted subpar global growth remains tangible despite tentative signs of stabilizing momentum,” it said.
Other Forecasts
• The fund held or reduced its estimates for most of the world’s biggest economies for 2020, with Japan a notable exception. It raised the outlook to 0.7% from 0.5%, reflecting the anticipated boost from stimulus measures undertaken in December.
• The fund raised China’s estimate by 0.2 percentage point to 6%. The phase one trade deal is likely to alleviate near-term cyclical weakness, though unresolved disputes on broader U.S.-China economic relations “will continue weighing on activity.”
• The 2020 estimate for the U.S. was lowered by 0.1 percentage point to 2%, and 2021 held at 1.7%.
• India’s downgrade was because domestic demand has slowed more sharply than expected amid stress in the non-bank financial sector and a decline in credit growth, the fund said.
--With assistance from Zoe Schneeweiss, Catherine Bosley, Francine Lacqua and Haslinda Amin.
This article was provided by Bloomberg News.