The International Monetary Fund (IMF) has cut its growth forecasts for the global economy for this year and next.
It predicts growth of 3.2% in 2019, down from its April forecast of 3.3%. Growth next year is set to pick up to 3.5% next year, although that is below its earlier forecast of 3.6%.
Growth “remains subdued”, the IMF says, and there is an urgent need to reduce trade and technology tensions.
The Fund has raised its growth forecast for the UK this year to 1.3% from 1.2%.
The revision for the UK reflects what the report calls a stronger-than-expected first three months of the year, boosted by pre-Brexit stockpiling.
Next year, the report predicts 1.4% growth. The UK forecasts are based on an assumption of an orderly Brexit followed by a gradual transition to the new regime. As the report notes, what this will be remains highly uncertain.
The IMF named a no-deal Brexit as one of the key risks to global economic growth.
“The principal risk factor to the global economy is that adverse developments – including further US-China tariffs, US auto tariffs, or a no-deal Brexit – sap confidence, weaken investment, dislocate global supply chains, and severely slow global growth below the baseline,” the Fund said.
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