The International Monetary Fund cut its forecast for the world economy, predicting it will grow at the weakest pace in three years in 2019.
IMF predicts global growth at 3.5% this year, lower than 3.7% growth expected in October. In its second downgrade in three months, IMF blamed softening demand across Europe and recent palpitations in financial markets
The fund left its projections for the U.S. and China unchanged at 2.5% and 6.2% respectively. Among major economies, the deepest revision was for Germany, which the IMF now sees expanding 1.3% this year, down 0.6 percentage point from October. Soft consumer demand and weak factory production after the introduction of stricter emission standards for cars was behind the downward shift.
India is projected to grow at 7.5% in 2019, up 0.1% from previous projection. India's economy is poised to pick up in 2019, benefiting from lower oil prices and a slower pace of monetary tightening than previously expected as inflation pressures ease.
While the IMF refrained from cutting its forecast for the Chinese economy in its most recent outlook, it warned that a deeper-than-envisaged slowdown in China could be a source of risk to the financial system, including commodity markets.