Home / Knowledge / News / Textiles / IMF's global growth forecast down to 3.4 % post Brexit
IMF's global growth forecast down to 3.4 % post Brexit
21
Jul '16
The International Monetary Fund (IMF) cut its forecasts for global economic growth 2016 and 2017 following the stunning U.K. vote to leave the European Union (EU) that created a wave of uncertainty amid already-fragile business and consumer confidence.

The global economy is projected to expand 3.1 % this year and 3.4 % in 2017, representing a 0.1% point reduction for both years relative to IMF's April World Economic Outlook, the IMF said in its update of the April WEO released on Tuesday.

With the event still unfolding, the report says that it is still very difficult to quantify the potential repercussions.

“Brexit has thrown a spanner in the works,” said Maurice Obstfeld, IMF Chief Economist and Economic Counsellor. Global growth, already sluggish, will suffer as a result, putting the onus on policy makers to strengthen banking systems and deliver on plans to carry out much-needed structural reforms.

“The Brexit vote implies a substantial increase in economic, political, and institutional uncertainty, which is projected to have negative macroeconomic consequences, especially in advanced European economies,” it said.

According to the update, the economies of the United Kingdom (U.K.) and Europe will be hit the hardest by fallout from the June 23 referendum that led to a change of government in Britain.

The U.K. economy will expand 1.7 % in 2016, which is 0.2 % point less than forecast in April. In 2017, the nation's growth will slow to 1.3 %, down 0.9 point from the April estimate and the biggest reduction among advanced economies.

For the EU area, IMF raised its forecast by 0.1 point this year, to 1.6 %, and lowered it by 0.2 point in 2017, to 1.4 %.

Policymakers in U.K. and EU will play a key role in tempering uncertainty that could further damage growth in Europe and elsewhere, the IMF said. It called on them to engineer a “smooth and predictable transition to a new set of post-Brexit trading and financial relationships that as much as possible preserves gains from trade between the U.K. and the EU.”

Had it not been for Brexit, IMF was prepared to leave its outlook for this year broadly unchanged as better-than-expected euro area performance offset disappointing U.S. first-quarter growth. The IMF also had been prepared to raise its outlook for 2017 slightly, by 0.1 percentage point, on the back of improved performance in a few big emerging markets, in particular Brazil and Russia.

The IMF, however, maintained that its forecasts were contingent on the “benign” assumptions that uncertainty following the U.K. referendum would gradually wane, the EU and U.K. would manage to avoid a large increase in economic barriers, and that financial market fallout would be limited.


Must ReadView All

GST Council allows ITC refund to fabrics

Textiles | On 23rd Jul 2018

GST Council allows ITC refund to fabrics

The Goods and Services Tax (GST) Council at its 28th meeting held...

Courtesy: Pexels

Apparel/Garments | On 23rd Jul 2018

Turkey aims to export apparel worth $25 bn in 5 years

Turkey aims to increase its apparel exports by 50 per cent in 2018...

Kathmandu urges Dhaka to lift ban on yarn import

Textiles | On 23rd Jul 2018

Kathmandu urges Dhaka to lift ban on yarn import

Landlocked Nepal has urged Bangladesh to withdraw its restriction on...

Interviews View All

Sunil Kumar Sharma
Loknayak JPNSSSG Ltd

'The blend of cotton–linen yarn has high demand in the domestic and...

Karin Ekberg
Leadership & Sustainability

Sustainable models are beneficial for brands, retailers and manufacturers

Janak Dhamanwala & Sunil Dhamanwala
Jansun

Moving towards sustainability is also a social change

Harsh Shah

Fynd is the central online shopping destination for fashion, offering...

Nitesh Mittal

Kusumgar Corporates is a leading manufacturer of technical textiles and...

Apurva Kothari

No Nasties was the first fashion brand in India to make 100 per cent...

Giorgio Mantovani
Corman S.p.A

Giorgio Mantovani, MD of Corman, with a presence in both Milano and New...

Ashok Desai
Bombay Textile Research Association

Bombay Textile Research Association (BTRA) is a leading name in textile...

Johan Berlin
InvestKonsult Sweden AB

Investkonsult Sweden AB has been buying and selling second-hand textile...

Divvya and Nidhhi Gambhir
Walnut

<b>Divvya and Nidhhi Gambhir</b> started their career with the launch of...

Wendell Rodricks
Wendell Rodricks

"We should not compare India and the West. There are things we do that...

Pranav Mishra
Huemn

Designers Pranav Mishra and Shyma Shetty’s Huemn is known for its...

Press Release

Press Release

Letter to Editor

Letter to Editor

RSS Feed

RSS Feed

Submit your press release on


editorial@fibre2fashion.com

Letter To Editor






(Max. 8000 char.)

Search Companies





SEARCH

Leave your Comments


July 2018

Subscribe today and get the latest update on Textiles, Fashion, Apparel and so on.

news category


Related Categories:

Advanced Search