As expected the IMF has downgraded its forecasts for global economic growth in its latest World Economic Outlook, although unlike other forecasters, it nudged up its estimates of Chinese growth for this year and next.
The Fund forecast global growth of 3.2% this year, compared to a downwardly revised forecast of 3.4% in January. The growth estimate also was lowered in July and October of last year.
And for 2017, the IMF said the global economy would grow 3.5%, down 0.1 percentage point from the January estimate.
The Fund blamed China’s economic slowdown, low oil prices (especially on emerging markets such as Brazil) and continuing economic weakness in Japan, Europe and the US.
The IMF cut its growth estimate for the US to 2.4% in 2016 from an earlier estimate of 2.6%. Japan’s growth estimate was halved to 0.5% this year, while UK growth is expected to slow to 1.9% this year from 2.2% in 2015. The IMF had previously forecast UK growth to remain stable at 2.2% for 2016.
The Fund said Brazil’s economy would now shrink by 3.8% against the previous forecast of a 3.5% contraction. Russian growth is forecast to contract by 1.8% this year, against a contraction of 1% forecast previously.
The IMF trimmed the estimate for the US to 2.4% from 2.6%. The Fund said it expected US exports to be hit by the stronger dollar, while lower oil prices would keep energy investment weak.
China’s growth forecast was raised 0.1 percentage point for this year and next to 6.5% and 6.2% respectively. The Fund said the increase was due to stimulus moves already taken by the Chinese government.
Forecasts from the World Bank and the Asian Development Bank had both cut China’s growth estimates.
