International Monetary Fund cuts Nigeria’s 2019 growth forecast to 2%

International Monetary Fund cuts Nigeria’s 2019 growth forecast to 2%

An ongoing trade war between the world's two largest economies could contribute to slowing economic growth this year, according to the International Monetary Fund (IMF).

As well as being concerned about a no-deal Brexit, the IMF fears that the trade war waged between the U.S. and China is creating casualties across the world by slowing global demand for goods. The IMF said while the Chinese growth rate has been on a downward slope India has experienced an upward trajectory in these years.

Unveiling its forecasts at the World Economic Forum in Davos, Switzerland, the fund left its prediction for USA growth this year unchanged at 2.5 per cent.

The growth projection for the United Kingdom in 2019 was maintained at 1.5% as the International Monetary Fund expects the effects from Brexit uncertainty on trade and investment will be offset by the fiscal stimulus announced in the Budget.

The downgrades heavily reflected weakness in Europe though, with Germany hurt by new vehicle emission rules, Italy under market pressure due to Rome's recent budget standoff with the European Union and Brexit worries aplenty too.

European shares fell on Monday from recent six-week highs as a global equity rally stalled after data confirmed a slowdown in China's economy and investors awaited for Britain's next steps to break the deadlock over Brexit.

More news: Stocks subdued as Chinese growth falls to weakest since '90

Chinese growth helped kickstart the world's economy after the 2008 financial crisis and economists fear the slowdown will put a drag on global growth. During the course of the day, the dollar wilted from its safe haven highs, losing its appeal due to the U.S. government in its 29th day of partial shutdown and weaker USA yields, with the United States 10 years -1.91% at 2.7320, at the lower end of the day's range of 2.724/2.780. The fund cited heightened trade tensions and rising interest rates.

Rising interest rates in the U.S. and elsewhere are also pinching emerging-market governments and companies that borrowed heavily when rates were ultra-low in the aftermath of the 2007-2009 Great Recession.

The country reported Monday growth of 6.6 per cent in 2018, the weakest since 1990.

Ms Gopinath said: 'We've already seen the negative effect of this uncertainty on British investment.

Analysts polled by Reuters also saw a higher chance Japan will slide into a recession, keeping the country's central bank under pressure to maintain its massive stimulus. Global growth for 2019 was trimmed from 3.7 per cent in the IMF's October's report to 3.5 per cent, blamed on weaker growth in China, Argentina and Turkey, among others, and worries over worldwide trade.

"The main shared policy priority is for countries to resolve co-operatively and quickly their trade disagreements and the resulting policy uncertainty, rather than raising harmful barriers further and destabilising an already slowing global economy".

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