In the World Economic Outlook released on Tuesday, the IMF downgraded global growth to 3% for 2019, the lowest since 2008–09 and a 0.3 percentage point downgrade from April 2019.
In a few major economies, including India, growth in 2019 is sharply lower than in 2018, but is expected to recover in 2020. About India, the report said, “…Growth softened in 2019 as corporate and environmental regulatory uncertainty, together with concerns about the health of the nonbank financial sector, weighed on demand.”
Here are the highlights of the report in charts.
Over the year, a common feature across the world has been a slowdown in industrial output. The graph depicts year-on-year percentage change across economic indicators.
Downturns in global trade are related to reduced investment spending. Global investment did slow down in line with reduced imports.
Production slowdown led to a standstill in trade. In the first half of 2019, global trade volume was just 1% above its value a year ago, the slowest pace for a 6-month period since 2012.
Auto slump impact
Another contributor to the slowdown in global trade has been the slump in car sales, which is reflected in a slowdown in the purchase of consumer durables.
The report said that on a global level, the manufacturing sector has slumped to levels not seen since the global recession of the late 2000s. It also said that “rising trade and geopolitical tensions” have taken “a toll on business confidence, investment decisions, and global trade”.