Global economic growth will slow this year to the weakest rate in a decade, the International Monetary Fund has said, blaming Donald Trump’s trade war with China, Brexit uncertainty and geopolitical tensions.
The IMF has downgraded its last forecasts, compiled in mid-March, and now expects growth of 3.2 per cent in 2019 and 3.5 per cent 2020.
There is a risk that even these lower forecasts prove to be too optimistic, the organisation said in its World Economic Outlook report published on Tuesday. One reason growth could be worse is an escalation in the US-China trade dispute, it added.
The US imposed tariffs on around $200bn of Chinese imports in May and banned American firms from doing business with Huawei, citing concerns that the Chinese company’s equipment could allow spying by Beijing on US citizens.
The IMF said there is a “pressing need” to resolve trade tensions and dispel the uncertainty around trade agreements, including between the UK and the EU.
1/15 Pork
There will be tariffs on pork in order to protect British farmers
Getty
2/15 Cheese
There will be tariffs in place on some cheeses including €22.10/100kg of cheddar, €19.10/100kg of processed cheese and €18.60/100kg on some blue cheeses
Getty
3/15 Milk
There will be no tariffs in place on milk
Getty
4/15 Car Parts
There will be no tariffs on car parts imported from Europe
PA
5/15 Cars
However finished cars will face tariffs of 10.6%
Getty
6/15 Alcoholic drinks
There will be no tariffs on alcoholic drinks – except on some rums due to ingredients used in their distilling process
Getty
7/15 Beef
There will be tariffs on beef in order to protect British farmers
Getty
8/15 Fish
There will be no tariffs on many types of fish including cod, haddock, salmon and sea bass
Getty
9/15 Fruit and vegetables
There will be no tariffs on almost all fruit and vegetables
Getty
10/15 Chocolate
There will be no tariffs on chocolate or other cocoa products
Getty
11/15 Poultry
There will be tariffs on poultry in order to protect British farmers
Getty
12/15 Ceramics
There will be some tariffs in place on ceramis
Getty
13/15 Steel
There will be no tariffs on steel
Getty
14/15 Coal
There will be no tariffs on coal
Getty
15/15 Lamb/Mutton
There will be tariffs on the meat of sheep in order to protect British farmers
Getty
1/15 Pork
There will be tariffs on pork in order to protect British farmers
Getty
2/15 Cheese
There will be tariffs in place on some cheeses including €22.10/100kg of cheddar, €19.10/100kg of processed cheese and €18.60/100kg on some blue cheeses
Getty
3/15 Milk
There will be no tariffs in place on milk
Getty
4/15 Car Parts
There will be no tariffs on car parts imported from Europe
PA
5/15 Cars
However finished cars will face tariffs of 10.6%
Getty
6/15 Alcoholic drinks
There will be no tariffs on alcoholic drinks – except on some rums due to ingredients used in their distilling process
Getty
7/15 Beef
There will be tariffs on beef in order to protect British farmers
Getty
8/15 Fish
There will be no tariffs on many types of fish including cod, haddock, salmon and sea bass
Getty
9/15 Fruit and vegetables
There will be no tariffs on almost all fruit and vegetables
Getty
10/15 Chocolate
There will be no tariffs on chocolate or other cocoa products
Getty
11/15 Poultry
There will be tariffs on poultry in order to protect British farmers
Getty
12/15 Ceramics
There will be some tariffs in place on ceramis
Getty
13/15 Steel
There will be no tariffs on steel
Getty
14/15 Coal
There will be no tariffs on coal
Getty
15/15 Lamb/Mutton
There will be tariffs on the meat of sheep in order to protect British farmers
Getty
“Specifically, countries should not use tariffs to target bilateral trade balances or as a substitute for dialogue to pressure others for reforms,” the report stated.
Gita Gopinath, the IMF’s chief economist, stressed that point at a press conference, saying: “The need for global cooperation is urgent.”
The fund has also updated its forecasts for the UK. It predicts growth of 1.3 per cent this year – compared with 1.2 per cent forecast earlier – and 1.4 per cent in 2020, as before.
However, this is based on the assumption of an orderly Brexit with a transition period. The forecasts were produced before Boris Johnson was named as the new UK prime minister, raising the risk of a no-deal Brexit. Mr Johnson has vowed to take Britain out of the EU in October with or without a deal.
The IMF’s outlook for the world economy broadly chimes with forecasts by the UK’s National Institute of Economic and Social Research, released on Monday. NIESR predicted growth of around 3.25 percent this year and 3.4 next year, both down from 3.6 per cent in 2018.
But NIESR was more pessimistic than the IMF about Britain’s prospects, seeing growth of 1.2 per cent in 2019 and 1.1 per cent in 2020, provided a no-deal Brexit is avoided.
