US growth projections stagnate over tax reform uncertainty: IMF report

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The International Monetary Fund (IMF) raised its projections for global economic growth in 2017, on assumptions that the “baseline outlook is strengthening” in both emerging markets and most developed countries.

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For the global economy as a whole, the IMF predicts growth to register at 3.6% for this year and 3.7% in 2018, both readings are a 0.1% upward revision from the agency’s April forecasts.

Meanwhile, the IMF left its forecast for the United States unchanged for 2017, at 2.2%, based on “significant policy uncertainty." Earlier forecasts had taken into account the prospect of growth-stimulating tax cuts in the United States; the IMF now sees that outcome as less certain for the current year.

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One of the main drivers of the higher global growth forecast was increased economic activity in developed economies, particularly China, where the IMF predicts GDP will register at 6.8% for the year. GDP forecasts were raised across Europe as well.

Some risk factors to global growth moving, according to the IMF, include a rollback of post-financial crisis regulations, a shift toward protectionist policies, persistently low inflation in advanced economies and a more rapid shift toward tighter global financial conditions.

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