Donald Trump’s claim that his protectionist measures are hurting China more than the US has received support from the International Monetary Fund in new forecasts showing how a fresh slowdown in the global economy has been concentrated in emerging economies.
The Washington-based IMF said the outlook was gloomier than it envisaged three months ago due to the tit-for-tat tariff war between the world’s two biggest economies, Brexit uncertainty and the impact of sanctions against Iran on oil prices.
In an update to its half-yearly World Economic Outlook, the IMF said it expected global growth to be 0.1 percentage points lower in both 2019 and 2020 than it envisaged in April, at 3.2% and 3.5% respectively.
The Fund’s country-by-country breakdown upgraded its forecast of US growth this year from 2.3% to 2.6% but downgraded China from 6.3% to 6.2%.
“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.”
Emerging and developing economies as a whole are now expected to grow by 4.1% this year – a cut of 0.3 points from April – with a slower pace of expansion pencilled in for Russia, India, Brazil and Mexico.