Earlier in the week, the International Monetary Fund announced that it will be downgrading its outlook for the world economy.
The IMF revealed that due to growing tensions over trade and rising interest rates it was forced to take this decision.
On Monday, October 8th, The IMF released a statement in which it said that by the end of this year the global economy will grow 3.7, similar to last year’s growth.
However, the IMF made a prediction of a 3.9 percent growth for 2018 earlier in July.
The IMF has slashed its outlook for Latin America, the Middle East, Sub-Saharan Africa as well as for Central and Eastern Europe, in addition to that, the 19 countries that use the euro currency have also had to face a similar treatment.
The report has been published at a time when the IMF and its sister lending organization, the World Bank is set to have met from Oct. 12-14 in Bali, Indonesia.
The IMF expects the U.S. economy to grow 2.9 percent this year, the fastest it has since 2005. The IMP has forecasted the U.S. growth to slow to 2.5 percent as President Donald Trump’s trade war with China takes a toll and the market gradually adapts to the effect of recent tax cuts.
As the American economy gradually begins gaining strength almost nine years after the end of the Great Recession, the U.S. Central Bank, and the Federal Reserve have gone on to raise short-term U.S. rates by three times this year.
The fund has maintained its forecast for growth in the Chinese economy at 6.6 percent for this year due to the U.S. taxes on Chinese imports, although for the next year the IMF shaved the outlook for China to 6.2 percent, predicting the country’s slowest growth since 1990.
As per reports, Beijing’s aggressive attempt to challenge American technological dominance has become a huge matter of debate for the world’s two biggest economies namely The United States and China.
According to sources close to the matter, Washington has filed charges on China accusing the country of utilizing predatory tactics, that includes forcing foreign companies to hand over trade secrets in return for admittance to the Chinese market and outright cybercrimes.
The overall outlook for world trade also took a tool as the fund predicted global trade to grow by 4.2 percent this year, that is down from 5.2 percent in comparison to 2017.