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IMF projects global economic growth, despite risks

IMF projects global economic growth, despite risks

Posted on: 1/22/2019 | Author: ATB Financial's Economics + Research Team

In its latest report, the International Monetary Fund (IMF) projects global economic growth of 3.5 per cent in 2019 and 3.6 per cent in 2020, news that is important to Alberta’s economy. While it can’t ensure good prices for our exports on its own, global growth can boost demand for the things we sell.

The report also suggests global output will be slightly slower over the next two years as a result of tariffs, nervous financial markets and a cooling Chinese economy. Chinese growth is projected to slip from 6.6 per cent in 2018 to 6.2 per cent in 2020 while U.S. growth is projected to fall from 2.9 per cent in 2018 to 1.8 per cent in 2020. Here in Canada, growth is forecast to go from 2.1 per cent in 2018 to 1.9 per cent in 2020.

There are a number of significant risks that could further erode global growth. If trade tensions escalate, the United Kingdom withdraws from the European Union without a deal, or the Chinese economy does worse than expected, global growth will suffer. The government shutdown in the U.S., a looming financial crisis in Italy and a potential showdown between the White House and the World Trade Organization are also not helping.

Despite this uncertainty, the current forecast is still good news. Risks aside, the IMF sees the global economy growing at a decent pace over the next two years, a reality that could prove beneficial for Alberta’s recovering economy.

Global economic growth, graph

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