Global growth set to slow in 2019 due to trade tension and lingering impact of financial tightening
The United States (US) Federal Reserve signals no rate hike in 2019
The European Union (EU) extends Brexit deadline to October 31
Crude oil prices gain in March led by production cuts and sanctions on Iran and Venezuela
The global economy seems poised on the cusp of a dip, with an upturn on the horizon. For the present,however, the International Monetary Fund (IMF) in its April World Economic Outlook printed a rathergloomy outlook, downgrading its 2019 global growth forecast to 3.3% from 3.5% estimated in January,as against 3.6% in 2018. The slowdown is attributed to rising trade tensions and financial tightening inH2 2018. However, it expects growth to rebound from H2 2019 owing to the now more-patient pace ofmonetary normalization by major central banks – led by the US Fed – and increased fiscal and monetarystimulus in countries such as China. For 2020, the IMF pegs growth to recover to 3.6%. That said, the IMFwarns the rebound later this year is vulnerable to downside risks including Brexit, high debt in certaincountries, tensions around trade policy, and a sense of unease in financial markets. Growth is expectedto slow down in 2019 for major advanced economies, including the US, euro area (EA), the UnitedKingdom (UK), and Japan, and would likely continue tapering down in 2020 for the US and Japan. Growthis expected to marginally slow down in emerging markets and developing economies in 2019 beforerecovering in 2020, especially in Latin America, the Middle East and North Africa, and a few Asianeconomies. China’s growth is forecast to continue declining in 2019 and 2020, although continuing to bein the Chinese government’s target range of 6-6.5%. The IMF has also revised down its global tradeoutlook sharply, to 3.4% (earlier estimated at 4%) in 2019 from 3.8% in 2018. However, trade is expectedto recover to 3.9% in 2020.