International Monetary Fund cuts global growth forecast to 3.3% for 2019

International Monetary Fund cuts global growth forecast to 3.3% for 2019

Accordingly, IMF's new World Economic Outlook projects a slowdown in growth in 2019 for 70 per cent of the world economy.

In general, the released World Economic Outlook showed that the world economic situation was deteriorating with many poor countries already struck by debt crisis.

IMF Chief Economist Gita Gopinath has raised concerns over the way India calculates its growth rate.

It said this may require synchronized but country-specific fiscal stimulus across economies, complemented by accommodative monetary policy, adding that adequate resources for multilateral institutions were essential to retain an effective safety net which would help stabilise the global economy.

Globally, IMF cut growth by 0.1 percentage point to 3.6 per cent for 2018 from its October 2018 World Economic Outlook due to weakness in the second-half of the year.

The WEO report expected growth rates in the euro zone to be 1.3 percent in 2019 and 1.5 percent in 2020, both lower than the 2018 and 2017 results.

Canada is not alone in the expected slowdown.

The IMF also calls for laws around land reform to change, to expedite infrastructure development as well as changes to hiring and firing laws in order create jobs and "absorb the country's large demographic dividend".

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The IMF improved the outlook for Chinese growth this year to 6.3%, as the conflict between the United States and China on their trade deal did not worsen, which was not what the IMF had expected.

The IMF said the Bank of England should be "cautious" on its interest rate policy, an apparent tip to wait before hiking borrowing costs.

"The current forecast envisages that global growth will level off in the first half of 2019 and firm up after that".

Germany's outlook suffered from weaker demand for its exports, softer consumer spending and new emissions standards which have depressed vehicle sales.

International Monetary Fund sees improved momentum for emerging and developing counties will continue into 2020 but activity in advanced economies is projected to continue to slow gradually as the impact of U.S. fiscal stimulus fades.

Commenting on emerging markets, Gopinath said: " Emerging markets have experienced some resumption in portfolio flows, a decline in sovereign borrowing costs, and a strengthening of their currencies relative to the U.S. dollar.

The global lender's World Economic Outlook projected Iran's economy will shrink by a massive 6.0 percent this year, its worst performance since it contracted by 7.7 percent in 2012. -China trade war did not materialize.

"Excessive stimulus to support near-term growth through a loosening of credit standards, or a resurgence of shadow banking activity and off-budget infrastructure spending, would heighten financial vulnerabilities, reduce future policy space, and raise downside risks to medium-term growth", the International Monetary Fund said.

The report is basing its growth projections for Ghana on a number of factors including a rise in commodity prices as well as the 1.5 billion dollar roads initiatives under the 2 billion dollar Synohydro Master Project.

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