IMF keeps global growth forecast unchanged, warns world growth will slow

In its latest World Economic Outlook report, the International Monetary Fund (IMF) maintained its forecasts for global growth this year but warned that the growth may continue to face a slowdown.

Key Highlights via Bloomberg:

“Global growth is projected to soften beyond the next couple of years,” the IMF said in its latest World Economic Outlook report. “Once their output gaps close, most advanced economies are poised to return to potential growth rates well below pre-crisis averages, held back by aging populations and lackluster productivity.”

IMF Chief Economist Maurice Obstfeld, noted: “The first shots in a potential trade war have now been fired,” reiterating the IMF’s warning earlier this month that the global trading order is in danger of being “torn apart.”

“Conflict could intensify if fiscal policies in the United States drive its trade deficit higher without action in Europe and Asia to reduce surpluses.”

Obstfeld called the current trade frictions “more of a phoney war,” referring to the period of limited conflict at the start of the Second World War.

“There’s still room for countries to engage in a more multilateral set of discussions to take advantage of the set of dispute resolution mechanisms that are in place to avoid an intensification.”