With trade wars and tighter credit, darkening market outlook, the International Monetary Fund (IMF) is poised to cut its forecast for global growth. Three months since predicting the world economy would grow 3.9 per cent this year and next, IMF is no longer quite so optimistic. The fund will update its World Economic Outlook on Oct. 9 ahead of opening its annual meeting in Bali, Indonesia.
While IMF acknowledged global expansion as still being the fastest in seven years, recent data suggests a cooling. Factory activity has plunged from Asia to Europe in September. The protectionist policy is turning into “actual trade barrier,” spreading uncertainty among businesses and consumers. A strengthening US dollar and tightening financial conditions have increased challenges for many emerging markets.
The IMF urged the countries to resolve their trade disputes, warning that the fracture of corporate supply chains could have “devastating” effects. The organisation has repeatedly warned that an all-out trade war could curb growth at a time when the world is enjoying the broadest upswing in years. But the US and China are not backing down, leaving no in sight to a long and bruising dispute.
