IMF Scales Back 2019 Global Economic Forecast Again

Conditions similar to just before the Great Recession of 2009

By Clyde Hughes

Chinese shoppers explore the "imported" section of a supermarket Tuesday in Beijing, China. The U.S.-China trade conflict was a major factor in the IMF again downgrading its global economic growth forecast. Photo by Stephen Shaver/UPI | License Photo

UPI -- For the second time this year, the International Monetary Fund on Tuesday downgraded the economic outlook for 2019 -- warning of a slowing global economy and urging leaders to be careful in what it called a "delicate moment."

The body's updated forecast calls for 3.3 percent growth this year -- down from 3.5 percent in January. The projection is the same as it was in 2009, just prior to the Great Recession.

IMF chief economist Gita Gopinath said ahead of the World Economic Outlook in Washington, D.C., indicators show slowing momentum for the global economy.

"The global expansion continues to weaken," she said in a statement. "For 70 percent of the global economy, we are projecting weaker growth for 2019 relative to 2018. We expect a recovery in 2020. However, we do see significant downside risks."

The IMF previously downgraded the 2019 outlook in January, noting particularly the trade conflict between the United States and China. The World Trade Organization downgraded its growth forecast last week. Tuesday's was the IMF's third downgrade in six months.

Gopinath pointed to uncertainty surrounding U.S.-China trade as a significant factor.

"We've seen an improvement with respect to trade talks between the U.S. and China," she said. "However, we are concerned that the trade tensions could escalate and it could show up in other sectors like the auto sector, which could be very damaging for global growth."

The IMF said last month, in its most recent outlook update, Britain leaving the European Union without an agreement could further upset growth, along with persistently weak economic data and prolonged fiscal uncertainty and elevated yields in Italy.

British Prime Minister Theresa May will meet Wednesday with European Union leaders to ask for another deadline extension. Britain now faces an April 12 deadline to leave the alliance, with or without a deal. May said Sunday she hopes cross-party talks will lead to a compromise in Parliament and an approved agreement.

No mention of Boeing's woes; I suspect that is of concern.