IMF cuts global growth forecast, warns of stagnation risk | Reuters

The International Monetary Fund cut its global growth forecast for the fourth time in the past year on Tuesday, citing China’s slowdown, persistently low oil prices and chronic weakness in advanced economies.The Fund, whose spring meetings along with the World Bank will be held in Washington this week, forecast that the global economy would grow at 3.2 percent in 2016 compared to its previous forecast of 3.4 percent in January.In its latest World Economic Outlook, the Fund warned of widespread stagnation risk and said weaker growth could leave the global economy more vulnerable to shocks such as currency depreciations or worsening geopolitical conflicts.The Fund called on global policymakers attending the IMF and World Bank meetings to take coordinated actions to boost demand with structural economic reforms, fiscal stimulus where possible and accommodative monetary policy.”Lower growth means less room for error,” IMF chief economist Maurice Obstfeld said in a statement. “Persistent slow growth has scarring effects that…reduce potential output and with it, demand and investment.”

Source: IMF cuts global growth forecast, warns of stagnation risk | Reuters

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