Monday, January 21, 2019

The Global Economy Is Slowing

The International Monetary Fund announced yesterday that it has cut its forecast for world economic growth this year, citing heightened trade tensions and rising U.S. interest rates. The IMF said it expects global growth this year of 3.5 percent, down from 3.7 percent in 2018 and down from the 3.7 percent it had forecast for 2019 back in October.

Growth in emerging-market countries is forecast to slow to 4.5 percent from 4.6 percent in 2018. But the biggest factor is that the IMF expects the Chinese economy — the world’s second biggest — to grow 6.2 percent this year, down from 6.6 percent in 2018.

That would be China's slowest growth rate since 1990. The country's economic downturn deepened in the final months of 2018, with fourth quarter growth rising just 6.4 percent from a year earlier. The official Chinese jobless rate ticked up to 4.9 percent last month from 4.8 percent in November.

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