The International Monetary Fund has reviewed its last year growth forecasts of the world economy. The organization expects world GDP to rise 3.3% in 2020, two tenths less than expected.
The global economy continues to slowdown. After a growth of 3.6% in 2018 and 2.9% in 2019, the world economy will record a growth of 3.3% in 2020, according to the latest forecast of the International Monetary Fund (IMF).
The organization has revised downward the estimates made last October, and has cut the world economy’s progress by two tenths. Amid the countries in which the fund has cut its forecasts the most are India, South Africa and Mexico.
“The downward revision primarily reflects negative surprises to economic activity in a few emerging market economies, notably India, which led to a reassessment of growth prospects over the next two years,” said the report of the organization. “In a few cases, this reassessment also reflects the impact of increased social unrest,” the statement added.
The organization foresees that the Indian economy will witness a growth of 5.8% in 2020
Concretely, the cut in the forecast of the Asian country has been one of the factors of the downward revision of the global Gross Domestic Product (GDP). The organization expects the country’s economy to advance 5.8% in 2020, 1.2 points below expectations.
“Domestic demand slowed more sharply than expected in India amid stress in the non-bank financial sector and a decline in credit growth,” notes the IMF regarding India’s new forecast.
South Africa, meanwhile, has also taken one of the biggest IMF cuts in its latest update. The entity notes that the economy of the African country will rise 0.8% in 2020, three tenths below the October forecasts. For Mexico, for its part, the IMF has also lowered its estimates by 0.3%. The country’s GDP will rise 1% in 2020.
The IMF expects Chinese GDP to rise 6% in 2020
China and Japan, on the other hand, have been overturned. In the forecasts made yesterday, the IMF points out that the Chinese GDP will rise 6% in 2020, two tenths higher than expected. Japan, meanwhile, will record economic growth of 0.7% this year, also two tenths more than expected.
According to the latest estimates, the euro zone will rebound 1.3%, compared to the expected 1.2%, and in the case of the United States, GDP will moderate from 2.3% to 2%, according to the IMF. For the main European powers, the IMF has not made new forecasts, except for Spain.
The IMF expects the country’s economy to grow 1.6% in 2020, two tenths less than expected, hitherto weighed down by the slowdown in domestic demand and exports. This is the largest reduction in forecasts among developed countries.
Less impact from the trade war and Brexit
The IMF has stressed that the negotiations between China and the United States and the United Kingdom’s departure from the European Union are being more favorable than expected, and has helped boost commercial activity in the world.
The organization explained that, “there has been a certain withdrawal from the context of decrease in exposure to risk prevailing on the date of publication of the October report.”
“The attitude of the markets has been stimulated by indications that manufacturing activity and international trade are reaching a turning point, by a general reorientation towards an accommodative monetary policy, by intermittently favorable news about trade negotiations between the United States and China,” said the agency.