Second quarter 2019 global macroeconomic outlook

July 30, 2019

The IMF continues to reduce their growth projections as the global economic expansion slows, trade tensions escalate, and uncertainty related to Brexit continues.

  • The IMF now forecasts global growth to be 3.2% in 2019 and 3.5% in 2020 (both revised down by 0.1%).
  • In advanced economies, growth is projected to slow from the 2.2% 2018 level to 1.9% in 2019 and 1.7% in 2020. While the forecast for growth in the U.S. was revised up in 2019 (2.6% versus 2.3%) given strong exports and an increase in inventories, expectations for a slowdown to 1.9% in 2020 remains due to the reduction in fiscal stimulus. Growth in the euro area and Japan are both projected to be lower than the U.S. this year and next.
  • In emerging and developing economies, growth is forecasted to be 4.1% in 2019 and 4.7% in 2020, but both estimates were revised down as tariffs continue to impact investment and trade. China’s  growth is expected to slow even further given the escalation in trade tensions with the U.S. and overall slower growth globally. Fiscal stimulus will likely offset only part of the impact of the trade dispute.
  • Overall, inflation is projected to remain level over the coming years, close to long-term averages.