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Tariff war taking a toll on global growth: IMF

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Tariff war taking a toll on global growth: IMF

Nusa Dua (Indonesia) - US growth will decline once parts of its fiscal stimulus go into reverse.

By Reuters

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Published: Tue 9 Oct 2018, 11:00 PM

Last updated: Wed 10 Oct 2018, 1:17 AM

The International Monetary Fund (IMF) on Tuesday cut its global economic growth forecasts for 2018 and 2019, saying that the US-China trade war was taking a toll and emerging markets were struggling with tighter liquidity and capital outflows.
The new forecasts, released on the Indonesian resort island of Bali where the IMF and World Bank annual meetings are getting under way, show that a burst of strong growth, fuelled partly by US tax cuts and rising demand for imports, was starting to wane.
The IMF said in an update to its World Economic Outlook it was now predicting 3.7 per cent global growth in both 2018 and 2019, down from its July forecast of 3.9 per cent growth for both years.
The downgrade reflects a confluence of factors, including the introduction of import tariffs between the US and China, weaker performances by eurozone countries, Britain and Japan, and rising interest rates that are pressuring some emerging markets with capital outflows, notably Argentina, Brazil, Turkey, South Africa, Indonesia and Mexico.
"US growth will decline once parts of its fiscal stimulus go into reverse," IMF chief economist Maurice Obstfeld said in a statement.


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