IMF Spots Trouble for Global Economy After 2020

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The IMF said prospects for developing economies to grow per-capita incomes face difficulties over the next five years, especially in commodity-exporting countries in the Middle East, sub-Saharan Africa, Latin America and the Caribbean.

The IMF saved the current forecast of Ukraine's GDP growth at the rate of 3.2 percent.

"Things continue at strong levels in 2018", he said.

Beyond that horizon, it was more pessimistic, projecting global growth will fade as central banks tighten monetary policy, the US fiscal stimulus subsides and China's gradual slowdown continues.

But IMF chief economist Maurice Obstfeld said those effects will fade quickly, causing growth to slow in subsequent years.

In its latest World Economic Outlook released on Tuesday, the International Monetary Fund says the global upswing that began in mid-2016 has become broader and stronger, led by faster growth in the Euro area, Japan, China and the US.

The global economy is still on an upswing, but the good times may not last beyond the next year or two.

But trade tensions, such as the United States and China's recent dueling tariff announcements, could take a direct toll on trade and economic activity and also cause financial market turmoil that would tighten financial conditions and hurt confidence.

In a sign of its growing concern that protectionism is being stimulated by voter scepticism, the International Monetary Fund used its half-yearly health check for the world economy to tell policymakers they needed to address the public's concerns before a better-than-expected period of growth came to an end.

He attributes the rosier USA outlook to federal tax cuts, a massive US$300 billion spending package, and the possibility of an additional spending or infrastructure bill.

It also upgraded its forecast for United States growth in 2018 to 2.9%, up from 2.7% previously.

The 2018-19 growth forecast is the fastest since a 5.1-per-cent global rate in 2010, as the world briefly rebounded from the 2008 financial crisis.

Compared with forecasts issued in October 2017, the predictions for this year for the euro-area, Japan and the USA have all been raised by half a percentage point or slightly more.

"Over the medium term, growth is expected to gradually rise with continued implementation of structural reforms that raise productivity and incentivise private investment", the report read.

The IMF made only modest changes to its forecasts for the UK.

The fund cut its forecast for Canada to 2.1% this year, down 0.2 point from three months ago.