The International Monetary Fund (IMF) has lowered its forecast for global economic growth for this year and next. The IMF now expects growth of 3.5% this year, compared with the previous estimate of 3.8% which it made in October. The growth forecast for 2016 has also been cut, to 3.7%.
The downgrade to the forecasts comes despite one major boost for the global economy - the sharp fall in oil prices, which is positive for most countries. The IMF expects that to be more than offset by negative factors, notably weaker investment. That in turn reflects diminished expectations about the growth prospects for many developed and emerging economies over the next few years. If business expects weaker growth, there is less opportunity to sell goods and services and so less incentive to invest.
THE ECONOMIES IN BOTH EUROPE AND CHINA ARE SLOWING AND MORE DEPENDENT ON THE USA THAN EVER, AND OBAMA WANTS TO RAISE TAXES????