{
  "title": "World Economic Outlook Update, July 2019: Still Sluggish Global Growth",
  "publication": "World Economic Outlook, July 2019",
  "sourceUrl": "https://www.imf.org/en/publications/weo/issues/2019/07/18/weoupdatejuly2019",
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  "summary": "Global growth remains subdued. Global growth is forecast at 3.2 percent in 2019, picking up to 3.5 percent in 2020 (0.1 percentage point lower than in the April WEO projections for both years).",
  "sections": [
    {
      "heading": "Overview",
      "content": "- Global growth is forecast at 3.2 percent in 2019, picking up to 3.5 percent in 2020 (0.1 percentage point lower than in the April WEO projections for both years).\n- GDP releases so far this year, together with generally softening inflation, point to weaker-than-anticipated global activity.\n- Investment and demand for consumer durables have been subdued across advanced and emerging market economies, contributing to sluggish global trade.\n- The projected growth pickup in 2020 is precarious and presumes stabilization in stressed emerging market and developing economies and progress toward resolving trade policy differences."
    },
    {
      "heading": "Subdued momentum: demand, trade, inflation, and policy cues",
      "content": "- Weak final demand\n  - Positive surprises to growth in some advanced economies (United States, Japan) contrasted with weaker-than-expected activity in emerging market and developing economies.\n  - Inventory accumulation of unsold goods lifted first quarter GDP in the United States and the United Kingdom; soft imports boosted output in China and Japan.\n  - Service sector activity held up, while global manufacturing slowdown continued, reflecting weak business spending (machinery and equipment) and consumer purchases of durable goods.\n- Soft global trade\n  - Trade volume growth declined to around ½ percent year-on-year in the first quarter of 2019 after dropping below 2 percent in the fourth quarter of 2018.\n  - Slow trade, particularly in emerging Asia, creates headwinds for investment; purchasing managers’ surveys point to weak outlook for manufacturing and new orders.\n- Muted inflation\n  - Core inflation across advanced economies has softened below target (for example in the United States) or remained well below it (euro area, Japan).\n  - Core inflation has dropped further below historical averages in many emerging market and developing economies, except Argentina, Turkey, and Venezuela.\n  - Headline inflation has remained subdued across most advanced and emerging market economies despite oil price influences.\n- Mixed policy cues and shifts in risk appetite\n  - Risk sentiment improved in June after central bank signals of likely further accommodation and the June G20 summit agreement to resume US-China trade talks.\n  - Financial conditions in the United States and the euro area are easier than at the time of the April WEO; broadly unchanged for other regions."
    },
    {
      "heading": "Global forecast and regional projections",
      "content": "- Global\n  - World output: 3.2 percent in 2019; 3.5 percent in 2020; difference from April 2019 WEO Projections: –0.1.\n  - The forecast reflects the May 2019 increase of US tariffs on $200 billion of Chinese exports from 10 percent to 25 percent, and retaliation by China.\n  - About 70 percent of the increase in the global growth forecast for 2020 relative to 2019 is accounted for by projected stabilization or recovery in stressed economies.\n- Advanced economies\n  - Projected growth: 1.9 percent in 2019 and 1.7 percent in 2020 (0.1 percentage point higher in 2019 than in April).\n  - United States: 2.6 percent in 2019 (0.3 percentage point higher than in the April WEO), moderating to 1.9 percent in 2020.\n  - Euro area: 1.3 percent in 2019 and 1.6 percent in 2020 (0.1 percentage point higher than in April).\n  - United Kingdom: 1.3 percent in 2019 and 1.4 percent in 2020 (0.1 percentage point higher in 2019 than forecast in April).\n  - Japan: 0.9 percent in 2019 (0.1 percentage point lower than in April), 0.4 percent in 2020.\n- Emerging market and developing economies (aggregate)\n  - Projected growth: 4.1 percent in 2019, rising to 4.7 percent in 2020; forecasts are 0.3 and 0.1 percentage point lower, respectively, than in April.\n- Regional highlights\n  - Emerging and Developing Asia: 6.2 percent in 2019–20 (0.1 percentage point lower than in April for both years).\n    - China: 6.2 percent in 2019 and 6.0 percent in 2020 (0.1 percentage point lower each year relative to April).\n    - India: 7.0 percent in 2019, 7.2 percent in 2020 (downward revision of 0.3 percentage point for both years).\n  - Emerging and Developing Europe: 1.0 percent in 2019 (0.2 percentage point higher than April), 2.3 percent in 2020 (0.5 percentage point lower than April).\n  - Latin America and the Caribbean: 0.6 percent in 2019 (0.8 percentage point lower than April), 2.3 percent in 2020.\n    - Brazil and Mexico downgraded notably; Argentina’s 2019 contraction moderated but recovery in 2020 is more modest.\n    - Venezuela: economy expected to shrink about 35 percent in 2019.\n  - Middle East, North Africa, Afghanistan, and Pakistan: 1.0 percent in 2019, about 3.0 percent in 2020 (2019 forecast 0.5 percentage point lower than April, largely due to Iran).\n  - Sub-Saharan Africa: 3.4 percent in 2019 and 3.6 percent in 2020 (0.1 percentage point lower for both years than April).\n  - Commonwealth of Independent States: 1.9 percent in 2019, 2.4 percent in 2020 (2019 growth revised down 0.3 percentage point reflecting Russia).\n- Memorandum items from Table 1 (selected)\n  - World Trade Volume (goods and services): quoted as an indicator in the table (see original for full series).\n  - Commodity Prices (US dollars): Oil average price was $68.33 in 2018; assumed price based on futures markets (as of May 28, 2019) is $65.52 in 2019 and $63.88 in 2020.\n  - As of mid-July, 10-year government bond yields dropped by about 45 basis points since March in the United States, to 2.10 percent; by about 30 basis points in Germany to –0.25 percent; and by about 10 basis points in Japan to -0.12 percent."
    },
    {
      "heading": "Downside risks (dominant)",
      "content": "- Escalating trade and technology tensions that dent sentiment and slow investment; potential for US-China tariffs, US auto tariffs, or a no-deal Brexit to dislocate supply chains.\n- Abrupt shifts in risk sentiment: a protracted risk-off episode could expose financial vulnerabilities accumulated after years of low interest rates, making highly leveraged borrowers difficult to roll over debt and causing capital flow retrenchment from emerging markets.\n- Disinflationary pressures: lower inflation and entrenched lower inflation expectations increase debt service difficulties, weigh on corporate investment, and constrain monetary policy space.\n- Climate change, political risks, conflict: overarching threats to health, livelihoods, and global activity; civil strife and geopolitical tensions raise humanitarian costs, migration strains, and commodity volatility."
    },
    {
      "heading": "Policy priorities and recommendations",
      "content": "- Multilateral actions\n  - Reduce trade and technology tensions and expeditiously resolve uncertainty around trade agreements (including UK-EU and the free trade area encompassing Canada, Mexico, and the United States).\n  - Countries should not use tariffs to target bilateral trade balances or as a substitute for dialogue to pressure others for reforms.\n  - Strengthen the rules-based multilateral trading system: ensure enforcement of existing WTO rules, resolve deadlock over its appellate body, modernize WTO rules (digital services, subsidies, technology transfer), and advance negotiations in new areas such as digital trade.\n  - Enhance international cooperation on mitigating and adapting to climate change, addressing cross-border tax evasion and corruption, and avoiding rollback of financial regulatory reforms.\n  - Ensure multilateral institutions are adequately resourced to counteract disruptive portfolio adjustments in a highly indebted world economy.\n- National-level priorities (by country group)\n  - Advanced economies\n    - With subdued final demand and muted inflation, accommodative monetary policy remains appropriate.\n    - Strengthen macroprudential policies and supervisory approaches to curb financial vulnerabilities induced by monetary accommodation.\n    - Fiscal policy should smooth demand, protect the vulnerable, bolster growth potential with structural reform–supporting spending, and ensure sustainable public finances over the medium term.\n    - If growth weakens relative to baseline, macroeconomic policies should turn more accommodative depending on country circumstances.\n  - Emerging market and developing economies\n    - Central banks can consider becoming accommodative where output is below potential and inflation expectations are anchored.\n    - Fiscal policy should focus on containing debt while prioritizing infrastructure and social spending over recurrent expenditure and poorly targeted subsidies—especially important for low-income developing countries.\n    - Macroprudential policies should ensure adequate capital and liquidity buffers; minimize balance sheet currency and maturity mismatches; and preserve the buffering role of flexible exchange rates.\n\nSource: World Economic Outlook Update, July 2019.\n\n---\n\n Content in this bundle\n\n- IMF World Economic Outlook Update, July 2019; Still Sluggish Global Growth; July 23, 2019\n  - IMF World Economic Outlook Update, July 2019; Still Sluggish Global Growth; July 23, 2019 (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - IMF World Economic Outlook Update, July 2019; Still Sluggish Global Growth; July 23, 2019 (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\n References\n\n- Sign up to receive free e-mail notices when new series and/or country items are posted on the IMF website.\n- Modify your profile\n- https://www.imf.org/en/home\n\nSource: https://www.imf.org/en/publications/weo/issues/2019/07/18/weoupdatejuly2019"
    }
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    "Published: July 18, 2019",
    "Global growth is forecast at 3.2 percent in 2019, picking up to 3.5 percent in 2020 (0.1 percentage point lower than in the April WEO projections for both years).",
    "GDP releases so far this year, together with generally softening inflation, point to weaker-than-anticipated global activity.",
    "Investment and demand for consumer durables have been subdued across advanced and emerging market economies, contributing to sluggish global trade.",
    "The projected growth pickup in 2020 is precarious and presumes stabilization in stressed emerging market and developing economies and progress toward resolving trade policy differences.",
    "Weak final demand",
    "Soft global trade",
    "Muted inflation",
    "Mixed policy cues and shifts in risk appetite",
    "Global",
    "Advanced economies",
    "Emerging market and developing economies (aggregate)",
    "Regional highlights",
    "Memorandum items from Table 1 (selected)",
    "Escalating trade and technology tensions that dent sentiment and slow investment; potential for US-China tariffs, US auto tariffs, or a no-deal Brexit to dislocate supply chains.",
    "Abrupt shifts in risk sentiment: a protracted risk-off episode could expose financial vulnerabilities accumulated after years of low interest rates, making highly leveraged borrowers difficult to roll over debt and causing capital flow retrenchment from emerging markets.",
    "Disinflationary pressures: lower inflation and entrenched lower inflation expectations increase debt service difficulties, weigh on corporate investment, and constrain monetary policy space.",
    "Climate change, political risks, conflict: overarching threats to health, livelihoods, and global activity; civil strife and geopolitical tensions raise humanitarian costs, migration strains, and commodity volatility.",
    "Multilateral actions",
    "National-level priorities (by country group)",
    "**IMF World Economic Outlook Update, July 2019; Still Sluggish Global Growth; July 23, 2019**",
    "[Sign up to receive free e-mail notices when new series and/or country items are posted on the IMF website.](https://www.imf.org/en/email-subscription/index)",
    "[Modify your profile](https://www.imf.org/en/email-subscription/login)"
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      "title": "IMF World Economic Outlook Update, July 2019; Still Sluggish Global Growth; July 23, 2019",
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