The IMF downgraded its forecast for the global economy because of Brexit

Almaty. July 20. Silkroadnews – The International Monetary Fund (IMF) has downgraded its forecast for global economic growth for 2017-2018 following the Brexit vote, KazTAG reports.

“The global economy is projected to expand 3.1 percent this year and 3.4 percent in 2017, according to the IMF. Those forecasts represent a 0.1 percentage point reduction for both years relative to the IMF’s April World Economic Outlook”, the statement says.

With this it is also explained that the forecast has been reduced slightly so far, as it is quite hard to evaluate the risks the Brexit has brought into the global economy. The fund’s officials do not exclude that later the forecast can be reviewed.

The IMF has also lowered its forecast for the UK economy: British GDP is expected to grow by 1.7% (0.2 percentage point less compared to April forecast) this year and 1.3% next year (down 0.9 point from the April estimate).

For the Eurozone the IMF has lowered the forecast for next year only: GDP of the European countries using a single currency is projected to grow by 1.4% only, though April outlook said about 1.6% growth.

“Brexit will impact many countries of the world, including, for example, the U.S. and China. The IMF has also revised its forecast slightly for the American economy,” the report says.

In addition, the IMF has considered negative Brexit scenarios that could lead to serious losses for the world economy. They mainly relate to the failure of negotiations between the UK and the EU, which could lead to the breach of international trade agreements, panic in the financial markets and recession in the UK.

The report also says about oil market stabilization due to lower deliveries by non-OPEC countries. Canada, for example, has reduced production due to the forest fires. The oil prices stabilization helped Russia and other exporters.