IMF warns of threats of protectionism to growth

WashingtonI / AFP

The IMF on Tuesday left its global economic forecasts unchanged into 2017 but called governments to take action against the threats of low growth and protectionism.
Global output is expected to grow this year at a rate of 3.1 percent before rising to 3.4 percent next year, estimates that are unchanged from July, according to the International Monetary Fund. But the Fund downgraded forecasts both for growth in global trade volume and for advanced economies’ output, saying that prospects for richer countries had darkened this year. “It is vitally important to defend the prospects for increasing trade integration,” said IMF chief economist Maurice Obstfeld.
“Turning back the clock on trade can only deepen and prolong the world economy’s current doldrums.”
The IMF notably cut its growth forecast for the United States, the world’s largest economy, but upgraded those for Japan and the eurozone. “Taken as a whole, the world economy has moved sideways,” Obstfeld said in remarks accompanying the new forecast. He said that “sub-par growth” was stirring negative economic and political forces around the world. The IMF downgraded its outlook for advanced economies this year by 0.2 percentage points to 1.6 percent but raised it slightly for emerging and developing economies to 4.2 percent. Next year’s forecasts were unchanged.