IMF sees weaker global economy but upgrades U.S. forecast; Canada unchanged

WASHINGTON – The International Monetary Fund is downgrading its outlook for world economic growth because of simmering international trade tensions, although its assessment of the Canadian economy is unchanged.

The fund kept its forecast for Canadian economic growth at 1.5 per cent for this year and 1.9 per cent for 2020.

At the same time, the fund is also boosting its forecast for U.S. economy this year, citing expectations that the Federal Reserve will cut interest rates.

The IMF expects the global economy to expand 3.2 per cent in 2019, down from 3.6 per centin 2018 and from the 3.3 per cent expansion it forecast for this year back in April. The lending organization cited heightened trade tensions and specifically a tariff war between the United States and China.

The fund now expects the U.S. economy to grow 2.6 per centin 2019, down from 2.9 per cent last year but up from the 2.3 per cent it forecast in April. The U.S. outlook improved as the Fed dropped plans to raise rates.

The IMF says climate change remains an overarching threat to health and livelihoods in many countries, as well as to global economic activity.