The latest forecasts from the IMF (prior ones were in Jan)
- That's the slowest global growth forecast in a decade
- 2020 unchanged at 3.6%
- Says risks to the downside based on Brexit and US-China talks
- Says growth will stabilize in first half of 2019, sees gradual recovery afterwards
- Sees global trade volume up 3.4% vs 4.0% in Jan
- Cuts eurozone growth to 1.3% from 1.6%
- Cuts US to 2.3% from 2.5%
- Raises 2020 US forecast to 1.9% from 1.8%
- Raises 2019 China growth forecast to 6.3% from 6.2%
- Cuts 2020 China forecast to 6.1% from 6.3%
- Cuts LatAm to 1.4% from 2.0%
- Canada 1.5% vs 1.9% prior
- German 0.8% vs 1.3% prior
- France 1.3% vs 1.5% prior
- Italy +0.1% vs +0.6% prior
- Advanced economies 1.8% vs 2.0% prior
- Emerging markets 4.4% vs 4.5% prior
- Full report
This isn't a pretty picture. It was largely expected but it's a reminder that the entire reversal in market sentiment was based on a turn in central banks, not a turn in the real economy.
"With improvements expected in the second half of 2019, global economic growth in 2020 is projected to return to 3.6 percent. This return is predicated on a rebound in Argentina and Turkey and some improvement in a set of other stressed emerging market and developing economies, and therefore subject to considerable uncertainty," the report says.
They highlight public and private-sector debt as a risk and say that downside risks could "dramatically worsen the outlook"
"While the overall outlook remains benign, there are many downside risks. There is an uneasy truce on trade policy, as tensions could flare up again and play out in other areas (such as the auto industry) with large disruptions to global supply chains. Growth in China may surprise on the downside, and the risks surrounding Brexit remain heightened."
USD/JPY was falling before the data but sank further afterwards to hit an 8-day low of 111.03.
There will be a press conference shortly.
ForexLive
