IMF Signals that Global Economic Growth Will Provide Opportunity for Reform
The global economic recovery is strengthening, according to the International Monetary Fund (IMF).
In its latest World Economic Outlook, the IMF has revised its forecast for the global economy and is now expecting slightly stronger growth.
It now predicts growth of 3.6% this year and 3.7% in 2018.
The IMF’s forecast for the UK is the same as in its July report. It expects growth to slow from 1.8% in 2016 to 1.7% this year and to 1.5% in 2018.
Although the UK is an exception to the pattern of strengthening growth in the IMF’s assessment, for this year and next the growth projections are stronger than two other G7 economies, Japan and Italy.
The IMF’s judgment on the UK’s prospects reflects weaker growth in consumer spending because of the fall in the value of the pound and the impact that had on real, inflation-adjusted, incomes. However, it does say it expects inflation to decline gradually to the Bank of England’s 2% target.
For the medium term, the report says the UK’s growth outlook is highly uncertain and will depend in part on the new economic relationship with the EU and the extent of any increase in barriers to trade, migration and cross-border financial activity.