The International Monetary Fund sees growth slowing this year in the United States and the euro area — and it’s warning the world against barriers to trade as it prompts central banks to keep the money flowing.
Overall global growth is expected to expand at 3.1 percent in 2016, according to the IMF’s “World Economic Outlook” released Tuesday. That’s unchanged from its July forecast. But advanced economies, which include the United States, will slow this year to 1.6 percent growth. That compares with 2.1 percent last year and a July IMF forecast of 1.8 percent.
Next year, global growth is expected to improve to 3.4 percent, as a slowdown in advanced economies should be offset by a pickup in emerging market and developing economies, the IMF said. U.S. growth is also forecast to pick up to 2.2 percent in 2017 on diminishing pressures from low energy prices and dollar strength.
However, the IMF warned that the “persistent stagnation, particularly in advanced economies,” could fuel “populist calls” for restrictions on trade and immigration.
“It is vitally important to defend the prospects for increasing trade integration,” IMF chief economist and economic counsellor, Maurice Obstfeld, said in the global lender’s outlook. “Turning back the clock on trade can only deepen and prolong the world economy’s current doldrums.”