The International Monetary Fund (IMF) released its latest World Economic Outlook last week, in which the IMF marginally reduced its world GDP growth forecast to 3.2% for 2019, whilst foresaw the rate of economic growth at 3.5% for 2020. The IMF pointed out that world trade growth was 0.5% YoY in 1Q19 and claimed that the rate of world trade volume growth had been slow relative to the pace seen in the previous years. Whilst the IMF’s comment on the evolution of world trade was factually correct, the organisation did not put the figure into context, i.e. that trade growth was very strong between 3Q16 and 4Q18. In this context, the slowdown in world trade growth is nothing unusual, but a recurring cyclical phenomenon. Consequently, we believe that the tone of the IMF’s assessment and conclusion is very downbeat, as it put much emphasis on downside risks to global growth and refrained from pointing out potential positives, such as the oversight of central banks globally. In our opinion, the world is a happier place than stipulated by the IMF.
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