IMF forecast downgrades still assume 2020 recovery – ABN AMRO

Nick Kounis, head of financial markets research at ABN AMRO, notes that the IMF has revised its global growth estimates lower and noted that ‘the global economy is in a synchronized slowdown, with growth for 2019 downgraded again – to 3 percent – its slowest pace since the global financial crisis’.

Key Quotes

“It explained the weakness as being related to ‘rising trade barriers; elevated uncertainty surrounding trade and geopolitics; idiosyncratic factors causing macroeconomic strain in several emerging market economies; and structural factors, such as low productivity growth and ageing demographics in advanced economies’.”

“Despite the downgrades, the IMF continues to expect a modest improvement in global growth next year – to 3.4% – though it does admit that the recovery is ‘precarious’ and that risks are skewed to the downside.”

“Our own forecasts are 0.8% for this year and 0.6% for next. For the US, the IMF expects 2.4% in 2019 and 2.1% in 2020, while we  expect economic growth to slow from 2.2% this year to 1.3% next.”