INSUBCONTINENT EXCLUSIVE:
Washington: Global growth will keep a steady pace this year and next, buoyed by stronger trade and US fiscal stimulus that will fade by the
early 2020s, while increased tariffs could damage market confidence and output, the International Monetary Fund said on Tuesday.The IMF, in
its latest World Economic Outlook, kept its 2018 and 2019 global growth forecasts unchanged at 3.9 per cent for both years after upgrades in
January.The projections were released as thousands of global finance officials were gathering in Washington for the IMF and World Bank
spring meetings this week.The IMF said it raised its US growth forecast by 0.2 percentage point for both years, to 2.9 per cent for 2018 and
It said lower US corporate income tax rates and accelerated investments due to a temporary tax break would boost US growth through 2020, but
these effects would then reverse quickly, causing a slowdown."Global growth is projected to soften beyond the next couple of years," the IMF
said in the report, adding that advanced economies would be "held back by aging populations and lackluster productivity."The Trump
administration has maintained that Republican tax cuts passed last year would allow the United States to maintain sustained gross domestic
product growth above 3 per cent for years and defy forecasts that US budget deficits will balloon over the coming decade.For now, the IMF
said increased export demand was contributing to slight growth forecast upgrades for the euro area and Britain for 2018, while the IMF kept
its forecasts unchanged for Japan, China, India, Russia and Mexico.Forecasts were cut slightly for Canada, the Middle East and North African
countries, as well as a number of low-income developing countries.The IMF said prospects for developing economies to grow per-capita incomes
face difficult prospects over the next five years, especially in commodity-exporting countries in the Middle East, sub-Saharan Africa, Latin
America and the Caribbean.Risks to the global growth forecasts were broadly balanced for the next few quarters, with the potential for
stronger business profits to increase hiring and investments that could boost productivity, the IMF said.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."An increase in tariffs and nontariff trade barriers
could harm market sentiment, disrupt global supply chains, and slow the spread of new technologies, reducing global productivity and
investment," the IMF said
"Greater protectionism would also lower consumer welfare by making tradable consumer goods more expensive."Research from 2016, the IMF said,
showed that tariffs or other barriers that led to a 10 percent increase in import prices in all countries would lower global output and
consumption by about 1.75 percent after five years and close to 2 percent in the long term
2018(Except for the headline, this story has not been edited by staff and is published from a syndicated feed.)
