IMF cuts global growth projections amid China slowdown, rock-bottom oil prices

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The International Monetary Fund cut its global growth forecasts for the third time in less than a year on Tuesday, as new figures from Beijing showed that the Chinese economy grew at its slowest rate in a quarter of a century in 2015.

To back its forecasts, the IMF cited a sharp slowdown in China trade and weak commodity prices that are hammering Brazil and other emerging markets.

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The Fund forecast that the world economy would grow at 3.4 percent in 2016 and 3.6 percent in 2017, both years down 0.2 percentage point from the previous estimates made last October. It said policymakers should consider ways to bolster short-term demand.

The updated World Economic Outlook forecasts came as global financial markets have been roiled by worries over China’s slowdown — confirmed by official Chinese data on Tuesday — and plummeting oil prices.

The IMF maintained its previous China growth forecasts of 6.3 percent in 2016 and 6.0 percent in 2017, which represent sharp slowdowns from 2015.

China reported that growth for 2015 hit 6.9 percent after a year in which the world’s second biggest economy endured huge capital outflows, a slide in the currency and a summer stock market crash.

Shares in Europe and Asia rose and the dollar gained after the China data was released, as investors anticipated greater efforts by Beijing to spur growth.

Concerns about Beijing’s grip on economic policy have shot to the top of global investors’ risk list for 2016 after falls in its stock markets and the yuan stoked worries that the economy may be rapidly deteriorating.

The Fund said a steeper slowing of demand in China remained a risk to global growth and that weaker-than-expected Chinese imports and exports were weighing heavily on other emerging markets and commodity exporters.

The International Monetary Fund cut its global growth forecasts for the third time in less than a year on Tuesday, as new figures from Beijing showed that the Chinese economy grew at its slowest rate in a quarter of a century in 2015.

 

 

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About Kelvin Ching

I'm a professional Forex trader and I have been trading for over 7 years. I was a series 3 broker and a registered CTA with the NFA, the main regulatory agency in the United States, and I have been involved at the highest levels in commodity trading. I also have a background in Information Technology, graphics design, and programming... I'm the co-founder of CurrencyNewsTrading.com, a site dedicated to fundamental analysis and news trading.

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