IMF predicts stronger growth but warns of risks

From BBC - April 17, 2018

The International Monetary Fund has forecast that 2018 will be the strongest year for global growth since 2011.

In its new assessment of the World Economic Outlook, the IMF predicts growth this year and next of 3.9%.

However, it warned that performance could be curtailed by trade barriers.

For the UK, the IMF has made a modest upgrade for growth this year to 1.6%. For next year, the forecast has been slightly reduced, to 1.5%.

The IMF report warned that the current momentum was "not assured".

It lists a number of risks that could lead to weaker performance than its main forecast, including what it calls policies that "harm international trade".

The report refers to "waning support for global integration". It says increased trade barriers - tariffs or other restrictions - could harm sentiment in financial markets, disrupt global supply chains and slow the spread of new technology.

Protectionism also affects consumers by making tradable goods more expensive.

WTO warns over tit-for-tat trade wars

The complexity of UK/EU trade talks

The increased tension in recent months over trade largely reflects President Trump's view that the deficit in US trade - the country imports more than it exports - is a result of poor agreements negotiated by his predecessors and other countries taking advantage of the US.

But IMF chief economist Maurice Obstfeld dismisses the idea that the steps taken by the US can reduce the deficit.

Lurking dangers


Continue reading at BBC »