The US-China trade war has taken a toll on global economic growth if one goes by the IMF report. This week, the IMF’s World Economic Outlook report lowered its global annual GDP growth forecast to 3.7% for 2018-19 versus its previous 3.9% target from April. Global growth, despite holding solid compared to earlier in the decade, has apparently plateaued out.
“There are clouds on the horizon,” says the economic counsellor and director of research at the IMF. “Growth has proven to be less balanced than hoped. Not only have some downside risks that the last WEO identified been realised, the likelihood of further negative shocks to our growth forecast has risen.”
The IMF took down its GDP forecasts for the US and China, in particular, for 2019 because of negative impacts from the trade war.
It expects US GDP growth to fall from 2.9% in 2018, to 2.5% in 2019. For China, GDP will decline from 6.6% in 2018, to 6.2% in 2019. Eurozone, after growing 2.4% in 2017, the GDP is estimated to slow to 2.0% in 2018 and 1.9% in 2019.
In another pessimistic event, both OPEC and International Energy have trimmed their respective oil demand outlook for 2018 and 2019, citing poor growth and US-China trade war in particular.
