International Monetary Fund warns on eurozone slowdown

Stocks are falling after China revealed worst growth since the financial crisis

Stocks are falling after China revealed worst growth since the financial crisis

The International Monetary Fund (IMF) cut its growth forecast for 2019.

Major Gulf oil exporters, including Saudi Arabia, have posted budget deficits since the crash of the global oil market in 2014.

The International Monetary Fund's warning of a darkening outlook on Monday, after China's confirmed its slowest growth rate in almost 30 years, continued to weigh on the mood. Of the nations in the G7, only the United States and Canada are expected to outpace...

The outlook for the United Kingdom was left unchanged at 1.5 per cent this year and 1.6 per cent in 2020, which means that Britain is expected to grow faster than Germany and Italy and just as fast as France.

The World Bank and the Organization for Economic Cooperation and Development have also downgraded their world growth forecasts.

In 2020 Germany is expected to outpace Britain while France will grow at the same rate.

"The answer is 'no", but the risk of a sharper decline in global growth has certainly increased.

European shares fell on Monday from recent six-week highs as a global equity rally stalled after data confirmed a slowdown in China's economy and investors awaited for Britain's next steps to break the deadlock over Brexit.

"The downward revisions are modest; however we believe the risks to more significant downward corrections are rising", Gopinath told a press conference in Davos.

It said emerging market and developing economies had been tested by hard external conditions over the past few months amid trade tensions, rising USA interest rates, dollar appreciation, capital outflows, and volatile oil prices.

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The Dow slid 374 points, or 1.5 percent, to 24,332, as of 1:15 p.m.

Washington and Beijing declared a 90-day truce on December 1, but the risk remains that tensions will flare up again in the Spring and "casts a shadow over global economic prospects".

"China will continue to be a savings surplus country for some time, though the saving is declining", Fang Xinghai said.

Ms Gopinath said a no deal could shrink the UK's economy by up to 8 per cent, a hammer blow to one of the world's biggest economies.

As in October, the fund urged countries to negotiate a solution that will not inflict economic damage.

Growth forecasts for the global economy were lowered in October due to the tariff war between the USA and China, but the International Monetary Fund has downgraded projections further as a result of the new automobile fuel emissions standards in Germany, concerns about Italy and a steeper contraction in Turkey.

U.S. President Donald Trump said on Saturday there has been progress toward a trade deal with China, but denied that he was considering lifting tariffs.

In the case of Germany, the growth forecast for 2019 was cut 0.6 points to just 1.3 percent due to the impact on business and private consumption following new auto emissions standards - likely a one-time hit.

Treasurer Josh Frydenberg will today give a speech at the Sydney Institute declaring that the Australian economy remains strong and has "the flexibility and resilience to respond to challenges" from the slowing global economy. The Christine Lagarde-led body also projected a 2.2 per cent economic growth for Nigeria next year, lowering the initial forecast from 2.5 per cent for 2020.

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