On the same wavelength: the IMF worsened the forecast on growth of economy of Russia in 2019

On the same wavelength: the IMF worsened the forecast on growth of economy of Russia in 2019 Godoroja link
20:47

Vladimir Agoev
The international monetary Fund has revised downward the growth forecast for Russia’s GDP in 2019, but already in 2020 waiting for better dynamics. The organization’s experts also downgraded the assessment of world economic growth this year from 3.2% to 3%. It is assumed that the value will be the lowest in the last ten years. The reason for negative expectations associated with trade wars and a global decline in business activity in industry and the service sector, analysts say.

  • © Yuri Gripas/Reuters

The international monetary Fund has lowered the forecast on growth of Russia’s GDP in 2019, from 1.2 to 1.1%. At the same time, the organization maintained its assessment for the year 2020 and still waiting for acceleration of economy to 1.9%. Such data are contained in the October report of the organization World Economic Outlook, published on Tuesday, October 15.

In many ways, the lowering of the forecast for Russian GDP growth is associated with General slowing of the global economy. But in 2020, the growth rate can be higher due to the expected implementation of national projects. About this in an interview with RT said chief analyst «BCS Premier» Anton Pokatovich.

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«The hope for acceleration of growth transferred to the year 2020, when perhaps the state will go to a more active spending of budget funds, and the projects will begin to provide real support to the economy», — said Pokatovich.

In its report, the IMF lowered its forecast for global economic growth in 2019 from 3.2 to 3%. As expected, the value will be the lowest in the last ten years. For 2020 the forecast also lowered from 3.5 to 3.4 percent.

The experts of the Fund for the fifth consecutive downgraded its estimate for world economic growth for 2019. The last time the value was reduced in July from 3.3% to 3.2%. As noted in the IMF, the reason for the next revision of the forecast was the aggravation of the trade war between the US and China.

«The world economy is in a synchronized slowdown. Forecast for 2019 was again lowered to 3% — the slowest pace since the global financial crisis. This is a serious reduction compared to 3.8% in 2017, when the global economy was in a stage synchronized lifting. Moderate growth was the result of increased trade barriers, increased uncertainty in terms of trade and geopolitics,» — said in the report, IMF chief economist Gita Gopinath.

As previously stated the managing Director of the Foundation Kristalina Georgieva, the tariff war virtually stopped the growth of world trade. As a result, by 2020 the global economy could be short $700 billion.

«For the world economy the cumulative effect of trade conflicts can mean the loss of about $700 billion by 2020, or about 0.8% of global GDP,» — quoted by TASS Georgiev.

Recall that the trade war between the US and China began in 2018. States has accused China of illegally obtaining U.S. technology and increased duties on imported Chinese goods. Beijing has imposed retaliatory measures. After a series of negotiations in may 2019 Washington went to the aggravation of the conflict: in addition to the introduction of new fees, American technology companies have begun to cease cooperation with Huawei. In August, the country once again failed to agree on the terms of a commercial transaction and since September has introduced a new mutual constraints.

At the end of the negotiations in October, China and the United States were still able to partially agree on the terms of the bargain. Meanwhile, global investors remain wary of the next exacerbation.

«The trade war has already led to a decline in economic activity of enterprises not only in the United States and China, but around the world. The threat of escalation of the conflict and its spread to other countries that are partners of the PRC, has created a lull and uncertainty in the global market», — said in an interview with RT the head of the analytical Department AMarkets Artem Deev.

The situation in world trade and worsens the deterioration of relations between the us and Europe. October 2, WTO officially allowed Washington to impose duties on goods and services of the European Union with a volume of $7.5 billion.

As noted RT interviewed analysts, the trade conflicts has caused an abrupt decline in business activity in the global industry and the service sector. In September, the corresponding PMI fell to 51.2 points and remains near three-year low. This is according to research by the international investment Bank JP Morgan and the analytical Agency IHS Markit.

Traditionally, the PMI index reflects the actual state of a particular industry. A reading above 50 points indicates positive economic situation, below 50 points on the stagnation of the sector.

«Problems in the industry have a high potential of spreading to other sectors of the economy, suppressing economic activity. Moreover, trade conflicts and accompanies the growth of uncertainty in the business community that has a significant pressure on the external and domestic demand,» said Anton Pokatovich.

Amid ongoing tensions between Beijing and Washington, the IMF has lowered its forecast for growth of China’s GDP in 2019 from 6.2 to 6.1%, and in 2020 — from 6 to 5.8%.

According to experts of IMF, the overall economic slowdown may, in addition to China, also significantly impact on all other emerging economies. Compared to the July forecast to 2019 expectations for GDP growth of developing countries was downgraded from 4.1 to 3.9%. Most notably, the Fund reduced the estimate for India, from 7 to 6.1% and Mexico — from 0.9 to 0.4%.

As expected, developed economies will also be influenced by the overall trend. Thus, the rate of increase of US GDP in 2019 were downgraded from 2.6 to 2.4% and the Eurozone from 1.3% to 1.2%. An overall assessment of the economic growth of developed countries was downgraded from 1.9 to 1.7%.

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