Background: Global economic situation, World Economic Outlook, International Monetary Fund (IMF).
- The International Monetary Fund maintained its forecast for weak global growth and warned that further stagnation will fuel more populist sentiment against trade and immigration that would stifle activity, productivity and innovation.
- In the latest update of its World Economic Outlook, the IMF said that a drop in US growth for 2016 due to a weak first-half performance would be offset by strengthening in Japan, Germany, Russia, India and some other emerging markets.
- The Fund kept its overall global growth forecasts unchanged at 3.1 percent for 2016 and 3.4 percent for 2017 after cutting its outlook for five straight quarters.
- The IMF said advanced economies as a whole will see a weakening of growth in 2016, down 0.2 percentage point from July to 1.6 percent, while emerging market and developing economies will see a 0.1 percentage point gain in growth to 4.2 percent.
- The IMF said its 2017 forecast for both groups was unchanged, with advanced economies forecast to grow 1.8 percent and emerging markets at 4.6 percent.
- The US accounts for much of the decline in advanced economies, with a reduction to 1.6 percent growth from 2.2 percent forecast in July, due to a disappointing first-half performance.
- Growth forecasts for China remained unchanged at 6.6 percent for 2016 and 6.2 percent for 2017.
- India’s growth will improve slightly to 7.6 percent in both years.