(UPI) –– The International Monetary Fund adjusted its 2020 growth outlook slightly downward in a report released Monday, predicting that the world’s economic growth will continue to gain, but at a slower pace.
The IMF predicted that economies grew 2.9 percent in 2019 rather than the previously predicted 3 percent and will grow 3.3 percent instead of the previously expected 3.4 percent. The 3.4 percent growth predicted in 2021 is 0.2 down from past forecasts.
The agency said the downward movement was mainly due to the downward revisions for India.
“The projected recovery for global growth remains uncertain,” the IMF’s chief economist Gita Gopinath said in a statement. It continues to rely on recoveries in stressed and underperforming emerging market economies, as growth in advanced economies stabilizes at close to current levels.
“There are preliminary signs that the decline in manufacturing and trade may be bottoming out. This is partly from an improvement in the auto sector as disruptions from new emission standards start to fade,” Gopinath said.
The report was optimistic about the signing of the U.S.-China phase one trade deal in hopes it would cool the trade war between the world’s two largest economies.
“A U.S.-China Phase I deal, if durable, is expected to reduce the cumulative negative impact of trade tensions on global GDP by end 2020 — from 0.8 percent to 0.5 percent,” Gopinath said.
In the trade deal signed Wednesday, China promised to purchase an additional $200 billion in American goods and services over the next two years while making structural economic changes.
“Globally the big story is this extraordinary pivot by central banks in 2019,” BlackRock Vice Chairman Philip Hildebrand said, according to Bloomberg Television. “What’s been holding this back or offsetting this is the trade risks, the geopolitical risks, so if we can pull back on those, we should see global growth edging up.”