U.S. economic growth will be better than projected earlier this year while trade tensions will weigh on the global economy more than expected, the International Monetary Fund said Tuesday.
The IMF said it expects the U.S. economy to grow 2.6 percent in 2019, up from the 2.3 percent growth forecast in April’s World Economic Outlook. The revision reflects stronger-than-expected first quarter performance, the IMF said.
But a sharp slowdown in the growth of global trade is weighing on the global economy more than expected. Real global economic growth will slow to 3.2 percent this year, one-tenth of a percentage point lower than the April forecast. Last year, the global economy grew 3.6 percent. In 2017, it grew 3.8 percent, according to the IMF report.
The IMF now expects world trade will grow 2.5% in 2019, nearly a full percentage point lower than the April forecast.
Growth in the euro area is projected at 1.3 percent in 2019, unchanged from the April forecast. The United Kingdom is forecast to grow 1.3 percent, one-tenth of a percentage point higher than earlier expected.
“In China, the negative effects of escalating tariffs and weakening external demand have added pressure to an economy already in the midst of a structural slowdown and needed regulatory strengthening to rein in high dependence on debt,” the IMF reports.
Growth is expected to be 6.2 percent this year, one-tenth of a percentage point lower than the April projection.