For the fifth time in a year, the IMF has slashed their outlook for the global economy.
Growth will be 3.4% next year, the IMF says – that’s also down from the April and July projections.
If you’re looking to assign blame, you can point to the trade war.
“This subdued growth is a consequence of rising trade barriers; elevated uncertainty surrounding trade and geopolitics; idiosyncratic factors causing macroeconomic strain in several emerging market economies; and structural factors, such as low productivity growth and aging demographics in advanced economies”, the Fund’s Gita Gopinath writes.
As a reminder, trade uncertainty for advanced economies sits at a record high.
And things could certainly get worse.
“With a projected slowdown in China and the United States, and prominent downside risks, a much more subdued pace of global activity could well materialize”, the new outlook reads.
The Fund suggests that in order to “forestall such an outcome, policies should decisively aim at defusing trade tensions, reinvigorating multilateral cooperation, and providing timely support to economic activity where needed”.
Suffice to say trade tensions aren’t likely to be “defused” any time soon, and when it comes to “reinvigorating” multilateral institutions, that’s not going to happen at a time when nationalistic sentiment is still percolating thanks in no small part to the resiliency of the populist uprising which took western democracies by storm in 2015.
Fingers crossed for fiscal stimulus.