IMF trimmed global growth amid "no-deal" Brexit and trade war concerns
IMF trimmed global growth amid "no-deal" Brexit and trade war concerns, following downgrades in October, noting "the expansion is weakening and at a rate that is somewhat faster than expected." And risks for a more "significant downward corrections are rising." The Fund now projects 2019 GDP growth at 3.5% and 2020 at 3.6%, respectively, versus forecasts of 3.7% previously. U.S. GDP growth this year and next is seen at 2.5% and 1.8%, with the euro area at 1.6% and 1.7% (Germany at 1.3% and 1.6%), while China is projected at 6.2% for both 2019 and 2020. The potential for a hard Brexit was the biggest threat, though trade frictions, tighter financial conditions, and slowing in China and the Eurozone. And in the U.S., a protracted government shutdown poses risks. Growth in advanced economies was nudged lower due to revisions for the euro area given "significant revisions" for Germany amid production troubles in the auto sector, and for Italy amid sovereign and financial risks. A projected contraction in Turkey resulted in a downshift for emerging and developing economies. There was also a "significant downgrade" to growth in Mexico reflecting lower private investment. There were fears China's slowdown could be faster than expected "especially if trade tensions continue" which could "trigger abrupt sell-offs in financial and commodity markets."