IMF downgrades outlook for world economy to 3.7 pct. growth

FILE - In this May 8, 2018 file photo, a man walks by a money exchange house in downtown Buenos Aires, Argentina. The International Monetary Fund is downgrading its outlook for the world economy, citing rising interest rates and growing tensions over trade. The IMF said Monday, Oct. 8 that the global economy will grow 3.7 percent this year, the same as in 2017 but down from the 3.9 percent it was forecasting for 2018 in July. It slashed its outlook for the 19 countries that use the euro currency and for Central and Eastern Europe, Latin America, the Middle East and Sub-Saharan Africa. (AP Photo/Victor R. Caivano, File)
FILE - In this July 7, 2018 file photo, people walk past a mural on a bank showing symbols for American, Chinese and other world currencies in Beijing. The International Monetary Fund is downgrading its outlook for the world economy, citing rising interest rates and growing tensions over trade. The IMF said Monday, Oct. 8 that the global economy will grow 3.7 percent this year, the same as in 2017 but down from the 3.9 percent it was forecasting for 2018 in July. (AP Photo/Mark Schiefelbein, File)

WASHINGTON — The International Monetary Fund is downgrading its outlook for the world economy, citing rising interest rates and growing tensions over trade.

The IMF said Monday that the global economy will grow 3.7 percent this year, the same as in 2017 but down from the 3.9 percent it was forecasting for 2018 in July. It slashed its outlook for the 19 countries that use the euro currency and for Central and Eastern Europe, Latin America, the Middle East and Sub-Saharan Africa.

The report comes on the eve of the Oct. 12-14 meetings in Bali, Indonesia, of the IMF and its sister lending organization, the World Bank.

The IMF expects the U.S. economy to grow 2.9 percent this year, the fastest pace since 2005 and unchanged from the July forecast. But it predicts that U.S. growth will slow to 2.5 percent next year as the effect of recent tax cuts wears off and as President Donald Trump's trade war with China takes a toll.

The Federal Reserve, the U.S. central bank, has raised short-term U.S. rates three times this year as the American economy gains strength more than nine years after the end of the Great Recession.

The fund kept its forecast for growth in the Chinese economy unchanged at 6.6 percent this year. Citing the impact of U.S. taxes on Chinese imports, however, the IMF shaved the outlook for China next year to 6.2 percent, which would be the country's slowest growth since 1990.

The United States and China — the world's two biggest economies — are sparring over Beijing's aggressive effort to challenge American technological dominance. Washington charges that China uses predatory tactics, including outright cybertheft and forcing foreign companies to hand of trade secrets in exchange for access to the Chinese market.

The outlook for world trade overall also darkened: The fund expects global trade to grow 4.2 percent this year, down from 5.2 percent in 2017 and from the 4.8 percent it expected in July.

Must Read

Ahead of the Bell: US new-home sales

Aug 23, 2016

Sales of new homes expected to dip 2.9 percent in July

Farm safety top priority with farm tourism on the...

Aug 24, 2016

Connecticut officials are joining other states in educating local farmers about how to mitigate...

Clinton could face mounting problem with health...

Aug 29, 2016

Double-digit premium increases and exits by big-name insurers raise new questions about 'Obamacare'

Obama to juggle security, climate, rights on...

Aug 29, 2016

President Barack Obama faces thorny talks about the fight against the Islamic State group, climate...

Europe hits Apple with a $15 billion-plus tax bill

Aug 30, 2016

The European Union has ordered Apple to pay nearly $15 billion in back taxes to Ireland, plus...

Sign up now!

About Us

In The Headline sought to bring professionalism back into journalism, bringing you only the most exclusive and the most impactive news from all over the globe.

Contact us: sales[at]intheheadline.com