Oct 11, 2019

A synchronized global slowdown

Dion Rabouin
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Data: IMF, IIF, OECD and World Bank; Chart: Axios Visuals

The Institute of International Finance on Thursday lowered its growth forecast for 2019, the latest in a series of downward revisions from international economic organizations since the beginning of last year.

The big picture: "The global economy is now in a synchronized slowdown," incoming IMF managing director Kristalina Georgieva said at a recent news conference.

  • The IMF now expects slower growth in 90% of the world and that "growth this year will fall to its lowest rate since the beginning of the decade."

What's next: The IMF and World Bank earlier this week said they expect to write down their 2019 growth projections again — the third downward revision this year — at their meetings next week in Washington, D.C.

  • Elina Ribakova, deputy chief economist at the IIF, said the organization remains upbeat on the outlook despite the revision.
  • "We expect central banks to continue easing against the backdrop of slowing growth and assume no further deterioration in trade tensions," she told Axios in an email.

Flashback: It hasn't even been 2 years since then-IMF managing director Christine Lagarde said in January 2018 that the global economy was experiencing "the broadest synchronized global growth upsurge since 2010" and that "all signs point to a continuous strengthening."

Go deeper: Mainstream economists are getting radical

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Report: Key global economic indicators hit lowest level since 2016

Illustration: Aïda Amer/Axios

Headline economic indicators have hit their lowest levels since spring 2016 as the global economy sinks into a "synchronised stagnation" period, research by the Brookings Institution and the Financial Times published Sunday shows.

Why it matters: The Tracking Indexes for the Global Economic Recovery research shows weak growth in some major economies and "essentially no growth or even mild contraction" ahead of International Monetary Fund and World Bank meetings in Washington, D.C., this week — the first with Kristalina Georgieva as the IMF’s new managing director.

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Trump's trade war has reversed the world's growth story in 2 years

Illustration: Sarah Grillo/Axios

In January 2018, coming off of a year in which global growth rose to near 4%, then-IMF managing director Christine Lagarde said the global economy was experiencing "the broadest synchronized global growth upsurge since 2010" and that "all signs point to a continuous strengthening."

The latest: On Tuesday, the IMF said it expects global growth to slow to the weakest pace since the 2008 global financial crisis, noting the decline would be a significant drop from its 2017-18 levels.

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IMF predicts slowest global economic growth since 2008 financial crisis

Gita Gopinath, the IMF's chief economist, and Gian Maria Milesi-Ferretti, the IMF's research deputy director, take questions from the media. Photo: Olivier Douilery/AFP/Getty Images

The International Monetary Fund is now predicting global economic growth will slow to its weakest level since the 2008 financial crisis in its third revision of its 2019 forecast.

The big picture: A sharper-than-expected slowdown in international trade has affected manufacturing and investments, according to the organization's World Economic Outlook.

Go deeperArrowOct 15, 2019