In this July 13, 2018, photo, Chinese made children shoes carrying a Chinese map and U.S. flags are on display for a sale at a shop in Beijing. China announced it filled a World Trade Organization challenge Monday, July 16, 2018,  to U.S. President Donald Trump's proposal for a tariff hike on $200 billion of Chinese goods, reacting swiftly amid deepening concern about the economic impact of their spiraling technology dispute. (AP Photo/Andy Wong)
Chinese made children shoes carrying a Chinese map and US flags are on display for a sale at a shop in Beijing. The IMF has warned that downside risks to global growth "have become more salient, most Show more

IMF maintains global growth forecasts but warns of trade war troubles

The International Monetary Fund has maintained its global growth projections for this year and next at 3.9 per cent, but warned that the economic expansion is becoming uneven and less synchronised as escalating trade wars cloud future outlook.

The fund, in its latest update of the World Economic Outlook published on Monday, said growth in the US will remain on the same trajectory but will taper in some of the other economies, including those in the euro area.

“The rate of expansion appears to have peaked in some major economies and growth has become less synchronised,” the fund said. “Growth projections have been revised down for the euro area, Japan, and the United Kingdom, reflecting negative surprises to activity in early 2018.”

The global economic growth has come under pressure by escalating trade war, particularly, between the world's two largest economies - the US and China. Both have slapped import tariffs on a goods ranging from soybean to solar panels in a tit-for-tat trade dispute. The US has also imposed tariffs on steel and aluminium imports, further ruffling its major trade partners in the EU and North America.

In its push to re-craft bilateral deals, the US is renegotiating the Nafta trade agreement with Mexico and Canada, while the UK’s bid to clinch a better post-Brexit trade deal has hit several hurdles, casting further shadow on global trade commerce prospects.

“The possibility for more buoyant growth than forecast has faded somewhat in light of the weak out turns in the first quarter in several large economies, the moderation in high-frequency economic indicators, and tighter financial conditions in some vulnerable economies,” the IMF said. “Downside risks, on the other hand, have become more salient, most notably the possibilities of escalating and sustained trade actions, and of tighter global financial conditions.”


Read more:


In advanced economies, growth is projected to reach 2.4 per cent in 2018, 0.1 percentage point lower than the April forecast, “largely reflecting greater-than-expected growth moderations in the euro area and Japan after several quarters of above-potential growth”.

The fund maintained its forecast for US growth of 2.9 per cent in 2018 and 2.7 per cent in 2019, thanks to fiscal stimulus and robust private final demand. Growth in the euro area will reach 2.2 per cent this year and 1.9 per cent in 2019, lower than the IMF's previous forecasts. Japan’s economy will expand only 1 per cent in 2018 due to a contraction in the first quarter, the fund noted.

“With reduced slack and downside risks mounting, many countries need to rebuild fiscal buffers to create policy space for the next downturn and strengthen financial resilience to an environment of possibly higher market volatility,” the IMF said.

In emerging markets, growth has become even more disparate, with rising oil prices, higher US interest rates, a stronger dollar and trade and geopolitical tensions weighing on several vulnerable economies.

“Tighter financial conditions could potentially cause disruptive portfolio adjustments, sharp exchange rate movements, and further reductions in capital inflows to emerging markets, particularly those with weaker fundamentals or higher political risks,” the fund said.

The IMF’s projections come as the Chinese economy decelerated in line with expectations to 6.7 per cent in the second quarter at the slowest pace since 2016, official government figures showed on Monday. Growth moderated from 6.8 per cent in the previous quarter.

Thanks to higher oil prices, economic growth in the Middle East, North Africa, Afghanistan and Pakistan will rise to 3.5 per cent and 3.9 per cent this year and next respectively, higher than the April projections, the fund said in the update.

Economic growth in Saudi Arabia, the world’s biggest oil exporter, will reach 1.9 per cent in 2018 and 2019, the IMF added. The 2018 projection is 0.2 percentage points higher than the April forecast.

Apple's Lockdown Mode at a glance

At launch, Lockdown Mode will include the following protections:

Messages: Most attachment types other than images are blocked. Some features, like link previews, are disabled

Web browsing: Certain complex web technologies, like just-in-time JavaScript compilation, are disabled unless the user excludes a trusted site from Lockdown Mode

Apple services: Incoming invitations and service requests, including FaceTime calls, are blocked if the user has not previously sent the initiator a call or request

Connectivity: Wired connections with a computer or accessory are blocked when an iPhone is locked

Configurations: Configuration profiles cannot be installed, and the device cannot enroll into mobile device management while Lockdown Mode is on


Starring: Lupita Nyong'o, Joseph Quinn, Djimon Hounsou

Director: Michael Sarnoski

Rating: 4/5


Name: Xpanceo

Started: 2018

Founders: Roman Axelrod, Valentyn Volkov

Based: Dubai, UAE

Industry: Smart contact lenses, augmented/virtual reality

Funding: $40 million

Investor: Opportunity Venture (Asia)


Round 1: Beat Leolia Jeanjean 6-1, 6-2
Round 2: Beat Naomi Osaka 7-6, 1-6, 7-5
Round 3: Beat Marie Bouzkova 6-4, 6-2
Round 4: Beat Anastasia Potapova 6-0, 6-0
Quarter-final: Beat Marketa Vondrousova 6-0, 6-2
Semi-final: Beat Coco Gauff 6-2, 6-4
Final: Beat Jasmine Paolini 6-2, 6-2

Energy This Week

Expert analysis on oil & gas renewables and clean energy

      By signing up, I agree to The National's privacy policy
      Energy This Week