Synchronized Slowdown

By Isaac Cohen*

The Economic Counselor and Research Director of the International Monetary Fund Gita Gopinath presented, in Washington on October 15, the World Economic Outlook, the institution’s flagship publication. She summarized the global economic situation as follows: “the global outlook remains precarious, with a synchronized slowdown and an uncertain recovery.” The Fund has reviewed downwards its April projection of global growth for 2019, by 0.2 percent, to 3 percent, the lowest rate since the 2009 Great Recession.

In the introductory remarks, at the October 15 press conference, Research Director Gopinath identified the main cause of the slowdown. She said, “the weakness in growth is driven by a sharp deterioration in manufacturing and global trade, with higher tariffs and prolonged trade policy uncertainty damaging investment and demand for capital goods.”

This is reflected in the fall to 1 percent in the growth of the volume of world trade, the weakest level since 2012. In addition, the Fund estimates that “the US-China trade tensions will cumulatively reduce the level of global growth by 0.8 percent by 2020.” This is one of the first quantitative estimates of the global damage caused to the world economy by the protectionist policies emanating from the White House.

Looking ahead, the Fund projects “a modest improvement in global growth to 3.4 percent in 2020, another downward revision of 0.2 percent” of last April projections. The Fund also foresees escalating downside risks, from “heightened trade and geopolitical tensions, including Brexit-related risks.”

*International analyst and consultant, former Director ECLAC Washington. Commentator on economic and financial issues for CNN en Español TV and radio, UNIVISION, TELEMUNDO and other media.

About Ramón Jiménez

Ramón Jiménez, Managing Editor de MetroLatinoUSA.Com (MLN). Graduado de la Escuela de Periodismo de la Universidad del Distrito de Columbia (UDC). Email:

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