IMF Trimmed Forecasts for Global Economic Growth on Brexit
July 19th, 2016
The International Monetary Fund trimmed its forecasts for global economic growth this year and next as the unexpected UK vote to leave the European Union creates a wave of uncertainty amid already-fragile business and consumer confidence, the IMF said.
The IMF said Brexit vote implies a substantial increase in economic, political, and institutional uncertainty, that is projected to have negative macroeconomic consequences, especially in advanced European economies, in its quarterly economy outlook report released today.
Maurice Obstfeld, IMF Chief Economist and Economic Counsellor said “Brexit has thrown a spanner in the works” in the report, adding with the event still unfolding it is still very difficult to quantify potential repercussions.
On the Asia Pacific region, the monetary fund sees Brexit’s fallout is likely to be felt in Japan, where a stronger yen will limit growth. Thus the IMF said it lowered its growth forecast for Japan by 0.2 percent point, to 0.3 percent for this year. While it raised its forecast for Japan GDP for next year, to expand 0.1 percent, 0.2 percentage point more than predicted in April, due to postponement of the consumption tax increase.
IMF adjusted its forecast for China’s growth 0.1 percent point up, to 6.6 percent for 2016, while maintained its outlook forecast unchanged for 2017 at 6.2 percent. The report said Brexit fallout is likely to be muted for China, the world’s second-largest economy, because of its limited trade and financial links with the UK. However, the IMF said, if the growth in the European Union be affected significantly by the Brexit, the adverse effect on China could be material.
The article was published on 19 - 07- 2016 (20:45M GMT+800)
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