The IMF broke its estimate for global growth on Monday, cautioning that the economic momentum seen in recent years is slowing.
The IMF now lobs a 3.5 percent growth rate worldwide for 2019 and 3.6 percent for 2020. These are 0.2 and 0.1 piece points below its last forecasts in October — making it the second downturn revision in three months.
“A range of triggers beyond escalating swap tensions could spark a further deterioration in risk sentiment with adverse growth implications, especially the truth high levels of public and private debt,” the Fund said.
These potential triggers include a “no-deal” Brexit for the U.K. and a deeper-than-envisaged slowdown in China. The IMF give an account of comes on the back of China reporting its slowest economic growth in almost three decades.
Speaking at the World Trade Forum in Davos, Christine Lagarde, Managing Director of the IMF, said: “After two years of solid expansion, the world succinctness is growing more slowly than expected and risks are rising. But even as the economy continues to move ahead … it is faade significantly higher risks.”
The latest cut from the IMF “is just a confirmation of existing concerns of a slower 2019,” Singapore’s OCBC Resources Research said in a morning note.
The U.S. dollar index, which tracks the greenback against a basket of its peers, was at 96.321 after heart-rending an earlier low of 96.305.
The Japanese yen, widely viewed as a safe-haven currency, traded at 109.61 against the greenback after seeing levels here 109.5 in the previous session. The Australian dollar was at $0.7154 after slipping from highs of about $0.717 yesterday.
— CNBC’s Silvia Amaro helped to this report.