LOC22:57
19:57 GMT
WASHINGTON, Jan 22 (KUNA) -- The International Monetary Fund (IMF) on Monday raised its US growth forecasts in 2018 and 2019 by 0.4 percent and 0.6 percent, respectively.
Earlier 2017 forecasts, which indicated 2.3 percent growth, were amended to 2.7 percent in 2018, while for 2019, 1.9 percent was replaced with 2.5 percent, the IMF's latest World Economic Outlook predicted.
The revision was driven by the new US tax policy which is expected to "stimulate activity" with short-term impacts due to the investments that will come out of its corporate tax cuts.
The effect on the US is estimated to increase through 2020, at 1.2 percent, added the IMF.
These reforms would not only impact the US but also its trading partners and would account for about half of the global growth for this year and the next.
As for its global growth forecasts, these were raised to 3.9 percent this year due to the US tax cuts.
Meanwhile, the UK forecast was lowered 0.1 percent for 2019 but nonetheless it is expected to have a growth of 1.5 percent this year and the next.
This was attributed to the potential risk of an increase in trade barriers as a result of Brexit negotiations.
For Japan, the forecast was also lowered from 1.8 percent to 1.2 percent in 2018, and from 0.8 percent to 0.9 percent in 2019, according from data in the report.
There were a small number of other forecasts that were lowered for individual countries, the largest of which affected South Africa, which was downgraded by 0.7 percent due to increased political uncertainty and its effects on investment.
"A failure to make growth more inclusive and the widening of external imbalances in some countries, including the United States, could increase pressures for inward-looking policies," emphasised the report. (pickup previous)
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