World economy forecast to slow in 2019 amid trade tensions

World economy forecast to slow in 2019 amid trade tensions

World economy forecast to slow in 2019 amid trade tensions

Major Gulf oil exporters, including Saudi Arabia, have posted budget deficits since the crash of the global oil market in 2014.

Speaking at the World Economic Forum in Davos (Switzerland) on Monday, IMF chief Christine Lagarde said: "After two years of solid expansion the world economy is growing more slowly than expected and risks are rising".

The latest forecast from the International Monetary Fund revealed Britain will keep up with or outperform the growth of some of the biggest players in the eurozone, edging ahead of economic heavyweight Germany.

On Wall Street, stocks took another step lower in the wake of a report from the Financial Times that the United States had turned down an offer of preparatory trade talks from China. The Sarb growth forecast for this year is 1.7 percent, down from 1.9 percent; it is unchanged at 2 percent for 2020 and increases to 2.2 percent in 2021. The World Bank, the Organization for Economic Cooperation and Development, and other forecasters have also downgraded their world growth estimates.

Chinese growth helped kickstart the world's economy after the 2008 financial crisis and economists fear the slowdown will put a drag on global growth.

The Dow Jones Industrial Average fell 301.87 points, or 1.22 percent, to 24,404.48, the S&P 500 lost 37.81 points, or 1.42 percent, to 2,632.9 and the Nasdaq Composite dropped 136.87 points, or 1.91 percent, to 7,020.36.

European shares fell on Monday from recent six-week highs as a global equity rally stalled after data confirmed a slowdown in China's economy and investors awaited for Britain's next steps to break the deadlock over Brexit.

"A range of triggers beyond escalating trade tensions could spark a further deterioration in risk sentiment with adverse growth implications, especially given high levels of public and private debt", it said.

European markets closed mostly lower overnight over signs of slowing economic growth around the globe.

Washington and Beijing declared a 90-day truce on December 1, but the risk remains that tensions will flare up again in the Spring and "casts a shadow over global economic prospects".

Annabel Bishop, the chief economist at Investec, said South Africa was clearly expected to remain an under performer in the region.

As in October, the fund urged countries to negotiate a solution that will not inflict economic damage.

China isn't likely to slash holdings of USA debt, and the country's burgeoning savings pile means it will need to keep parking money in the world's biggest government-bond market.

The IMF has lowered its growth forecasts from 3.7 per cent in 2018 to 3.5 per cent in 2019.

The global growth forecast for 2020 is 3.6 percent, 0.1 percentage point lower than previously forecast.

The Euro took a small leg lower after the International Monetary Fund released its latest growth forecasts, and it's not a rosy outlook across the board. The country is slowing just as its leadership tries to turn it into a more modern economy by reducing its reliance on manufacturing and exports and increasing consumer spending.

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