tiptrot.com
tiptrot.com February 21, 2018


US Tax Overhaul Will Accelerate Global Growth, IMF Says

23 January 2018, 01:32 | Cedric Leonard

Agence France-Presse

Agence France-Presse

Comparing the January report to the last outlook, released back in October 2017, the new edition took into account the increased global growth momentum and the expected impact of the recently approved USA tax policy changes.

Though, the International Monetary Fund upgraded its growth forecast for the global economy in 2018 to 3.9 percent, it however downgraded the 2018 and 2019 growth forecasts for sub-Saharan Africa to 3.3 percent respectively. This update thus serves as the IMF's first major estimate of how the tax overhaul will ripple around the world economy - as a large, but temporary, deficit-fueled fiscal stimulus.

The eurozone economy is expected to grow by 2.2% this year and 2% in 2019, up from earlier estimates of 1.9% and 1.7%.

In addition to growth in the United States, the International Monetary Fund found that global growth increased about 3.7 percent in 2017, which is 0.1 percentage point higher than was previously projected.

The forecast which represents 0.2 percent from the 1.9 percent projected in October 2017 was contained in Fund's World Economic Outlook Update, January 2018 released yesterday.

But the fund cautioned that the positive effects of the US tax changes, which include a lower rate for corporations, would be fleeting. Both estimates were 0.1 percentage point higher than those given in its last outlook in October.


It said the growth pickup "has been broad based, with notable upside surprises in Europe and Asia".

Looking at the growth rates for previous years, a slowdown in Britain's economy was quickly evident, with the rate of GDP growth dropping from 1.9% in 2016 to the 1.5% predicted for 2019, yet that was far less than many had anticipated before the Brexit vote.

A stronger USA economy will also boost the economies of America's trading partners, especially Mexico and Canada.

But after that, the bill's near-term focus could become a liability.

Advanced economies are seeing solid simultaneous growth, and the United States tax reform passed just before Christmas will have a measurable effect, at least for a couple of years. "We see several reasons to doubt the durability of the current momentum". China, during the same period is expected to grow at 6.6% and 6.4% respectively, the IMF said.The IMF said, the aggregate growth forecast for the emerging markets and developing economies for 2018 and 2019 is unchanged, with marked differences in the outlook across regions.It projected India to grow at 7.4% in 2018 as against China's 6.8%. China is already striving to rein in the growth of credit in its economy, a move that will act to slow China's rapid pace of growth.

Much of this momentum will carry through into the near term, Mr Obstfeld said.



Other News

Trending Now

SE Michigan meteor was 'classic bolide'
A bolide is a special type of fireball which explodes in a bright terminal flash at its end, often with visible fragmentation. The space rock broke up in the atmosphere at 8:05 pm EST in an explosion that was large enough to register as a 2.0 quake .

Gunmen kill mother, daughter anti-polio team in Pakistan
Earlier on Thursday, two FC men were killed and another was injured in an ambush by militants in Double Road area of Quetta . Some unknown gunmen, coming on motorbikes, opened fire at the policemen and fled the scene, Samaa News said.

Two people die in Prague hotel fire
The fire occurred at Eurostars David Hotel, a block away from the Vltava River and near the Czech capital's National Theatre. Local emergency services report that 40 people were evacuated after the blaze broke out on the ground floor on Saturday.

Chelsea Agree Potential Move For Former City Striker
Chelsea are closing in on the signings of Edin Dzeko and Emerson Palmieri from AS Roma , according to reports. Chelsea are interested in signing Arturo Vidal from Bayern Munich this summer, report Bild .

Teen rape-murder case: Body of suspected abductor found
On a related note, the 15-year-old girl was brutally assaulted, her private parts mutilated and some of the vital organs ruptured. On Sunday evening, a 22-year-old was allegedly dragged into an SUV and gang-raped for hours in Faridabad.

Joshua Wong Imprisoned Again for 2014 Protests
Fourteen other defendants including activist Lester Shum were given suspended sentences on contempt charges. Hong Kong has been granted a high degree of autonomy under the "one country, two systems" principle.

Ubisoft announces dates for Assassin Creed Origins DLC's
No wording on the price point for the pack, but players can hop into Assassin's Creed Origins now and check out the pack. The Curse of the Pharaohs will be available as part of the season pass or available to purchase separately for $19.99.

Jose Mourinho: War of words with Chelsea's Antonio Conte over for me
Sometimes it's other managers' fault. "When I start [feuds] I take the responsibilities of that, and I've started [them] many times ".

Iran Prepared to Deal with Possible US Withdrawal from JCPOA: MP
Moving forward, the President outlined two paths forward on Iran: either fix the flaws set out above or withdraw from the deal. They are also the first concrete worldwide response to the Iranian government's treatment of protesters.

Mary Lou McDonald nominated as next leader of Sinn Féin
NOMINATIONS to become the next leader of Sinn Féin closed last night, with Mary Lou McDonald believed to be the only candidate. A fourth attempt to end the impasse is due to begin on Wednesday. "We have to challenge ourselves and our support base".