{"id":404633,"date":"2017-07-24T10:11:54","date_gmt":"2017-07-24T10:11:54","guid":{"rendered":"https:\/\/ghana-mma.com\/2017\/07\/24\/imf-downgrades-us-and-uk-growth\/"},"modified":"2017-07-24T10:11:54","modified_gmt":"2017-07-24T10:11:54","slug":"imf-downgrades-us-and-uk-growth","status":"publish","type":"post","link":"https:\/\/www.ghanamma.com\/2017\/07\/24\/imf-downgrades-us-and-uk-growth\/","title":{"rendered":"IMF downgrades US and UK growth"},"content":{"rendered":"

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The International Monetary Fund (IMF) has lowered its forecasts for US and UK economic growth this year, following \u201cweaker-than-expected activity\u201d in the first three months.<\/p>\n

The IMF says it now expects the UK to grow by 1.7% this year, compared with the 2% it was previously forecasting.<\/p>\n

The US will now grow 2.1%, as against the 2.3% it was predicting in April.<\/p>\n

Its prediction that the global economy will grow by 3.5% in 2017, and 3.6% in 2018, is unchanged.<\/p>\n

In its latest World Economic Outlook, the IMF said the \u201cpick-up in global growth\u201d that it had anticipated in its previous survey in April \u201cremains on track\u201d.<\/p>\n

However, it added: \u201cThe unchanged global growth projections mask somewhat different contributions at the country level.\u201d<\/p>\n

A Treasury spokesperson said the IMF forecast underlined why the government\u2019s plans to increase productivity and get \u201cthe very best deal with the EU\u201d after Brexit were \u201cvitally important\u201d.<\/p>\n

\u201cEmployment is at a record high and the deficit is down by three quarters, showing that the fundamentals of our economy are strong,\u201d they added.<\/p>\n

Trump \u2018uncertainty\u2019<\/h2>\n

The UK growth forecast for 2018 remains unchanged at 1.5%, but US growth for next year is now predicted to come in at 2.1%, instead of the 2.5% previously forecast.<\/p>\n

\u201cWhile the markdown in the [US] 2017 forecast reflects in part the weak growth outturn in the first quarter of the year, the major factor behind the growth revision, especially for 2018, is the assumption that fiscal policy will be less expansionary than previously assumed, given the uncertainty about the timing and nature of US fiscal policy changes,\u201d the IMF said.<\/p>\n

\u201cMarket expectations of fiscal stimulus have also receded.\u201d<\/p>\n\n

Analysis<\/b><\/p>\n

\"Union<\/p>\n

By Andrew Walker, BBC World Service economics correspondent<\/b><\/p>\n

The downgrade in the UK\u2019s forecast reflects the weak start to the year.<\/p>\n

The economy grew by 0.2% in the first three months. That is all we get by way of explanation from the IMF.<\/p>\n

It is a short report \u2013 just seven pages \u2013 and it updates the IMF\u2019s assessment for the whole world economy so there isn\u2019t much space to spell it out.<\/p>\n

The IMF is well known, some would say notorious, for warning before last year\u2019s referendum of the adverse economic consequences of leaving the European Union.<\/p>\n

Do the agency\u2019s economists think that the downgrade reflects evidence suggesting that they were right? The report doesn\u2019t say. We can only guess.<\/p>\n

But we will get a bit of hard evidence on how justified the downgrade was or was not later this week, when the Office for National Statistics publishes its first estimate of economic growth in the second quarter of the year.<\/p>\n\n

President Donald Trump\u2019s administration had been widely expected to pursue policies including tax cuts and infrastructure investment, which would have given a boost to the US economy.<\/p>\n

However, that outcome now appears less likely.<\/p>\n

Eurozone \u2018momentum\u2019<\/h2>\n

At the same time, the IMF has revised up projections for a number of eurozone economies, including France, Germany, Italy and Spain. It said first-quarter growth in those countries \u201cwas generally above expectations\u201d.<\/p>\n

\u201cThis, together with positive growth revisions for the last quarter of 2016 and high-frequency indicators for the second quarter of 2017, indicate stronger momentum in domestic demand than previously anticipated,\u201d it added.<\/p>\n

The biggest eurozone revisions were for the Spanish and Italian economies. Spain is now forecast to grow 3.1% this year, up from the previous prediction of 2.6%. Italy\u2019s 2017 growth forecast has risen from 0.8% to 1.3%.<\/p>\n

The euro area as a whole is expected to grow by 1.9% this year, up from 1.7%.<\/p>\n

China\u2019s growth projections have also been revised up, reflecting, the Fund says, \u201ca strong first quarter of 2017 and expectations of continued fiscal support\u201d.<\/p>\n

Its 2017 forecast has risen from 6.6% to 6.7%, while growth in 2018 is now expected to be 6.4% instead of 6.2%.<\/p>\n

The IMF hailed China\u2019s \u201cpolicy easing and supply-side reforms\u201d, including efforts to reduce excess capacity in the industrial sector.<\/p>\n<\/p><\/div>\n

\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\u0642\u0627\u0644\u0628 \u0648\u0631\u062f\u067e\u0631\u0633<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

The International Monetary Fund (IMF) has lowered its forecasts for US and UK economic growth this year, following \u201cweaker-than-expected activity\u201d in the first three months. The IMF says it now expects the UK to grow by 1.7% this year, compared with the 2% it was previously forecasting. The US will now grow 2.1%, as against […]<\/p>\n","protected":false},"author":0,"featured_media":404634,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[17],"tags":[],"class_list":["post-404633","post","type-post","status-publish","format-standard","has-post-thumbnail","category-world"],"yoast_head":"\nIMF downgrades US and UK growth - Ghanamma.com<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.ghanamma.com\/2017\/07\/24\/imf-downgrades-us-and-uk-growth\/\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:title\" content=\"IMF downgrades US and UK growth - Ghanamma.com\" \/>\n<meta name=\"twitter:description\" content=\"The International Monetary Fund (IMF) has lowered its forecasts for US and UK economic growth this year, following \u201cweaker-than-expected activity\u201d in the first three months. 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