US growth projections stagnate over tax reform uncertainty: IMF report

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.

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.

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.