The International Monetary Fund has grown more pessimistic over the last three months over global growth, as declining commodity prices and increasing financial market volatility take their toll, particularly on emerging markets.
The IMF’s new forecast for global growth this year and next was shaved by 0.2 percentage points each year, compared to the organization’s views from July. The pessimism was stark for Brazil and Canada in particular, with Brazilian projected output shaved by 1.5 percentage points this year and 1.7 percentage points next year, and with Canadian GDP trimmed by a half point lower this year and by 0.4 percentage points next year.
Weak oil prices have hurt both countries, with Brazil also being hurt by its exposure to China and a corruption scandal at state-run Petrobras.
Emerging economies such as China and Brazil are headed for their fifth straight year of declining growth, the IMF said.
The U.S. forecast from the IMF, of 2.6% growth this year and 2.8% next year, is a tenth of a percent higher for this year and two-tenths lower for 2016. The IMF forecast is a bit more optimistic than the Federal Reserve’s projection of 2.1% growth in 2015 and 2.3% growth in 2016.