IMF slashes global growth outlook

International lender cuts Turkey’s growth forecast from 4.2 to 3.5 percent in 2018 and from 3.9 to 0.4 percent in 2019

IMF slashes global growth outlook

The International Monetary Fund on Monday reduced global growth forecasts in its biannual World Economic Outlook report.

In the report, titled "Challenges to Steady Growth", the fund reduced expectations for both advanced economies and emerging markets alike, revising its global growth forecasts from 3.9 percent to 3.7 percent for both 2018 and 2019 due to increasing risks from higher customs tariffs, political uncertainty and capital outflows. 

The international lender also lowered Turkey’s growth predictions from 4.2 percent to 3.5 percent in 2018 and from 3.9 percent to 0.4 percent in the following year. 

Besides the country’s growth rate, the IMF predicts an increase in Turkey’s consumer price index of 15 percent by December and 16.7 percent by the end of 2019.

The IMF forecast the country's unemployment levels at 11 percent in 2018 and 12.3 percent in 2019. 

Also, the report predicted Turkey’s current account deficit to GDP ratio would be realized at 5.7 percent this year, dropping 1.4 percent by the end of 2019. 

Among advanced economies, the French and German growth outlooks were most severely cut, with expectations for Germany falling from 2.2 percent to 1.9 percent in 2018 and from 2.1 percent to 1.9 percent the following year. 

Forecasts for France show a 1.6 percent growth rate for both years, down from 1.8 percent for 2018 and 1.7 percent for 2019. 

While its U.S. forecast for 2018 remained stable at 2.9 percent, growth for 2019 was cut from 2.7 percent to 2.5 percent due to trade disputes with China.