Release date: 2018/1/23 8:43 • 10 times read
{International: The Euphrates News} The International Monetary Fund said that the future of the global economy seems optimistic.
The IMF sees recent economic growth as a positive boost on a large scale, particularly in Europe and Asia.
US tax reforms are expected to stimulate economic activity, especially in corporate investment.
But the IMF has drastically reduced its forecast for growth in South Africa this year and next.
The new global forecast grew by 3.9 percent this year and next year, an increase of 0.2 percent year on year, faster than in the past two years (3.7 percent in 2017 and 3.2 percent in 2016).
The report noted that there has been a jump in 120 economies, three quarters of global economic activity, over the past year, as well as advanced and emerging economies.
The IMF described the growth as the largest simultaneous global growth since 2010.
The indicators of specialized studies show that industrial activity will remain strong.
Although the economic performance improved to the end of the year was widespread, the report confirmed the achievement of positive growth “marked” in Asia and Europe.
The International Monetary Fund expects tax reforms approved by the United States last year to stimulate the US economy. The report pointed to the impact on the investment sector as a result of corporate tax cuts.
The report also expects total cumulative impact to reach 1.2 percent by 2020.
However, the IMF expects growth to slow over the years as from 2022 because some tax reform rules are temporary.
“The current economic momentum reflects the convergence of a range of factors that are likely not to last for long,” said Maurice Obstfeld, chief economist at the International Monetary Fund, during a report at a news conference in Davos.
It was important for Governments to take steps to overcome the obstacles to growth, to make them more inclusive and to make economies more resilient during the next downturn.
The report reduced some expectations for specific countries. Forecasts for South Africa showed the biggest negative change in 2019 by 0.7 percent, reflecting what the IMF described as the result of increased political unrest that casts a shadow over confidence and investment.
Expectations for Britain fell slightly by 0.1 percent in 2019. The report did not say why.
The report expects Britain to grow 1.5 percent this year and next. Britain ranks better than Italy and Japan within the Group of Seven industrialized nations, and ranks behind some other countries in the group.
Britain’s exit negotiations with the EU are one of several potential risks to the outlook, the report said. For example, long-term international trade agreements are subject to renegotiation.
The IMF says increasing trade barriers and re-regulation, if renegotiated, could have an impact on global investment and reduce efficiency.
“Any failure to achieve overall growth may increase the pressure on” policies that focus on internal growth, “the report warns, which the IMF describes as new trade barriers that it sees as damaging to economic growth.
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