These reviews of forecasts emphasize similar warnings issued in recent weeks by several Wall Street banks, including JPMorgan Chase & Co. and Goldman Sachs Group Inc., which noticed that the risk of recession in the US has increased significantly.
As Bloomberg noted, The fund reduced the forecast of global GDP growth for this year to 2.8 percent, compared to the previous forecast from January at 3.3 percent. Such a result would be the slowest increase from the time of Covid-19 pandemic in 2020, as well as the second worst result since 2009. The forecast for next year was reduced to 3 %, which means a decrease by 0.3 percentage.
The risk of recession increases significantly
For the USA, a trade war will cause supply shock that will increase prices and reduce performance, as noted by the IMF. For trading partners, higher tariffs will result in demand shock that will hit production and prices. Effective customs rates in the US have reached levels that have not been seen for a hundred years, added the fund. Although the US will probably avoid recession this year, the Fund has raised the probability of recession to 40 percent, compared to 27 percent. in October. The US and China are one of the countries that have experienced the largest reductions in the forecasts from the IMF.
China is to increase by 4 percent This and next year, which is a reduction in forecasts by 0.6 and 0.5 percentage points. An expensive fiscal policy in China will partially relieve the impact of customs tariffs, according to the description of the fund.
The prospects of economic growth in the world could improve immediately if commercial tensions were alleviated, and long -term complaints about non -lodge barriers and actions that interfere with trade by some countries would be resolved, added the IMF.
