On October 15, 2019, the IMF (International Monetary Fund) lowered its global growth rate forecasts for both of the 2019 and 2020 years. The IMF economics team now expects global GDP growth of 3.0% in 2019, down from its forecast of 3.2% last June. The outlook for 2020 is now set at 3.4%, down from the June estimate of 3.5%. If these forecasts are correct, they would represent the lowest global growth rates since the 2009 Recession year. By comparison, the global GDP growth rate in 2018 was 3.6%.
For the U.S. economy, the IMF now projects a GDP growth rate of 2.4%, down from a June forecast of 2.6%. The U.S. growth rate in 2018 was 2.9%. Further weakness in the U. S. economy is predicted for the 2020 year with a growth rate of just 2.1%.
The IMF blames uncertainties arising from the tariff and trade disputes between China and the U.S., as well as the Brexit turmoil which is hindering growth in the EU economies. The all-important China growth rates are also expected to decline from 2018 levels to 6.1% in 2019 and 5.8% in 2020, down from 6.6% in 2018.
The IMF report is a clear warning sign to the leaders of the global economy that the risks of a recession are growing and that positive actions to support confidence must be taken by world leaders if a serious downturn is to be avoided.