Output flap

16 January 2017 By Peter Thal Larsen Follow @Peter_TL

Last year the world economy grew at its slowest rate since 2009, the IMF reckons. Stimulus in China and the promise of Donald Trump’s tax cuts mean the next two years should be better. However, increased risks of protectionism make forecasts even more tentative than usual.

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Trump can make or break global growth hopes

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The International Monetary Fund expects global growth to pick up in 2017 and 2018 as stimulus in the United States cancels out slower-than-expected increases in output in South America and India.

In a regular update to its economic forecasts, the IMF said it still expects global GDP to grow by 3.4 percent in 2017 and 3.6 percent in 2018, up from an expected 3.1 percent last year.

However, the IMF raised its growth forecasts for the United States for the next two years by 0.1 percent and 0.4 percent respectively, reflecting increased optimism and the prospects for a growth boost from U.S. President-elect Donald Trump’s planned tax cuts.

“There is a wide dispersion of possible outcomes around the projections, given uncertainty surrounding the policy stance of the incoming U.S. administration and its global ramifications,” the IMF added.

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