IMF Cuts Growth Outlooks for US, UK, Japan and Canada

The International Monetary Fund has cut its global growth forecast for 2015 after a harsh winter led to a weak start in the US.

In an update to its World Economic Outlook (WEO), the Washington-based IMF said it now expected global output to expand by 3.3%, down from the 3.5% it pencilled in three months ago.

It also shaved its forecasts for four of the G7 leading industrial countries – the US, the UK, Japan and Canada – and said the risks to its forecast were skewed to the downside.

Growth in the US is now projected to be 2.5% this year, opposed to the 3.1%the IMF forecast in April. The UK’s growth forecasts have been cut from 2.7% to 2.4% in 2015 and from 2.3% to 2.2% in 2016.

The updated WEO showed global growth at 3.3% in 2015, slightly lower than the 3.4% recorded in 2014. In 2016, growth is expected to strengthen to 3.8%.

The IMF said it saw activity in the advanced economies picking up from 2.1% this year to 2.4% in 2016, but accepted that the expected acceleration in growth had yet to materialise.

“Disruptive asset price shifts and a further increase in financial market volatility remain an important downside risk,” it said. “Raising actual and potential output through a combination of demand support and structural reforms continues to be the economic policy priority.”

via The Guardian

Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza