IMF forecasts world growth acceleration but highlight trade uncertainties

The IMF’s World Economic Outlook January Update left world GDP growth estimates unchanged—with economic activity projected to accelerate to 3.4% in 2017 and 3.6% in 2018. However, the IMF noted a wide dispersion of possible outcomes around the projections given uncertainty surrounding the policy stance of the Trump administration. As more clarity emerges on US policies, their ramifications for the world economy should emerge. As this stage, fiscal stimulus is expected to boost near term US growth—the rationale behind sizeable gains in equity prices and the USD since the election—but there is also growing concern that trade protectionism will hinder longer term world growth.