IMF: World economy likely to grow 3.9 per cent this year

WASHINGTON – The International Monetary Fund is keeping its forecast for global economic growth unchanged at 3.9 per cent this year despite worries about rising trade tensions and higher oil prices. But the lending agency is downgrading the outlook for Europe and Japan.

The IMF now predicts that the economy of the 19-country eurozone will grow 2.2 per cent in 2018, down from the 2.4 per cent it forecast in April. The fund expects the Japanese economy to expand 1 per cent this year, downgrading its 1.2 per cent April forecast.

The IMF still expects tax cuts to lift U.S. economic growth to 2.9 per cent this year, up from 2.3 per cent in 2017.

Citing proliferating trade conflicts, IMF chief economist Maury Obstfeld warned that “the risk of worse outcomes has increased” for the world economy.