The “increasingly disappointing” world economy is facing the threat of a “synchronised slowdown” and mounting risks including another bout of financial market turmoil and a political backlash against globalisation, the International Monetary Fund warned.
In its semi-annual World Economic Outlook, the IMF yesterday reduced its global growth forecast for 2016 by 0.2 percentage points to 3.2 per cent, downgrading its expectations for a wide range of advanced and emerging economies.
The IMF said the world economy was increasingly vulnerable to “downside risks” including further market turmoil in the wake of this year’s China-led downturn as well as the political consequences of lacklustre growth since the 2008 global financial crisis. “Growth has been too slow for too long,” said Maurice Obstfeld, the IMF’s chief economist, warning of a widespread sense that too many people were being left behind.