U.S. growth forecasts slashed for 2017 and 2018
HONG KONG — The US economy’s next two years look rather shaky to the International Monetary Fund.
The IMF on Sunday lowered its economic growth forecasts for the United States to 2.1% for this year and the next, down from the 2.3% for 2017 and 2.5% for 2018 that it had predicted in April.
That’s a far cry from the 4% growth President Trump promised on the campaign trail, and significantly lower than the 3% growth he has targeted since assuming office.
The global financial institution cited the “uncertainty” over the Trump administration’s policies as the main reason for the downgrade.
“The major factor behind the growth revision, especially for 2018, is the assumption that fiscal policy will be less expansionary than previously assumed, given the uncertainty about the timing and nature of U.S. fiscal policy changes,” the IMF said in its latest World Economic Outlook released Sunday.
The IMF also listed the US economy’s sluggish start to 2017 — with a first-quarter growth of just 1.4% — as another factor in its slashing of current forecasts.
The downgrade comes as the US prepares to release its growth numbers for the second quarter this week, with economists predicting that growth improved to 2.7%.
Elsewhere around the world, meanwhile, the picture looks somewhat less grim. While the IMF also cut growth forecasts for the United Kingdom, it expects other European countries including Germany, France and Italy to grow faster in 2017 than earlier predicted. Growth forecasts for Canada, Japan and China this year were also revised up slightly.
The IMF kept its forecast for global growth unchanged at 3.5% for 2017 and 3.6% for 2018.