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IMF maintains world growth forecast and reduces Brazil

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The International Monetary Fund (IMF) on Monday maintained its prediction on world economic growth this year at 3.9% but warned of the effects of a trade war between the United States and China.

In contrast, the financial entity revised downward expectations on the performance of the Latin American economy, from 2.0% to 1.6%, a cut of 0.4 percentage points.

The Fund said that this reduction reflects the need for adjustments in Argentina, the scenario of political uncertainties in Brazil and the unresolved trade tensions between Mexico and the United States.

In the case of Brazil, it points out that the growth prospects are “uninspiring”.

“The economy performs below its potential, public debt is high high and rising, and more importantly, medium-term growth prospects remain uninspiring,” the IMF notes.

By 2018, the IMF expects Brazil to grow 1.8%; a reduction of half a percentage point in relation to the April estimate.

For the IMF, the growth of developed countries will be 2.4% (-0.1 percentage points) in 2018, with the United States leading (+ 2.9%).

The Fund also reduced expected expansion in the Eurozone (-0.2 percentage points to 2.2%) due to lower forecasts for Germany (-0.3 percentage points to 2.2%), France (-0 , 3 pp to 1.8%) and Italy (-0.3 pp to 1.2%).