News | Published October 16 2019

IMF: Slowest global growth since financial crisis

The International Monetary Fund has announced that the global economy has grown at its slowest pace since the financial crisis.

World growth will reach three per cent this year, compared to predictions of 3.2 per cent earlier in the year.

Compared with two years ago, the growth demonstrates a clear overall slowdown.

Factors such as Brexit, trade fights and other such geopolitical crises have been attributed as the causes for this slowdown.

The body furthered their concern, stating that the need for leaders to alleviate tensions was "urgent".

The international lending body has predicted growth in advanced economies would decrease from 2.3 per cent last year to 1.7 per cent this year.

Brexit has damaged the growth of investments, and growth in the UK has gone from 1.4 per cent last year to 1.2 in 2019.

The IMF have noted that central banks have been able to reduce the impact of the slowdown, through using low interest rates.

Had these not been in place, the body suggests the growth rate would have been half a per cent lower this year.

The fund stated, "With central banks having to spend limited ammunition to offset policy mistakes, they may have little left when the economy is in a tougher spot.”

Looking to the future, the IMF stated that the global economy could grow by 3.4 per cent next year, however, that this would largely require improvements in India.

They concluded "Policy missteps at this juncture, such as a no-deal Brexit or a further deepening of trade disputes, could severely undermine sentiment, growth, and job creation. The foremost priority, in many cases, is to remove policy-induced uncertainty or threats to growth."

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Authored by

Alice Jaspars
Culture Editor
October 16 2019

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