Asian markets close lower amid IMF’s global growth forecast downgrade

The International Monetary Fund lowered its forecast on global growth for this year and dampened predictions for the US and China next year.


Markets in Asia faltered on Tuesday on the back of a bearish report from the International Monetary Fund (IMF) which lowered its forecast on the global economy for this year and dampened predictions for both the United States (US) and China economies for next year.

The Hang Seng Index closed lower by 0.11 percent or 29.66 points, at 26,172.91 points. Meanwhile, the benchmark Nikkei 225 Index fell 1.32 percent or 314.33 points to 23,469.39 points at the close. The Australian S&P/ASX 200 index closed lower, down 1 percent, or 59.2 points at 6,041.10 points.

The Singapore Straits Times Index also closed lower, down 0.47 percent or 14.85 points, at 3,166.60 points.

Only the Shanghai Composite Index bucked the trend, as it closed the counter edging up 0.17 percent or 4.50 points, at 2,721.01 points. The Shenzhen composite ended the day flat at about 1,385.09 points.

IMF lowers global growth and trade predictions

About three months (in July) after the IMF gave a 3.9 percent global growth prediction, the organisation today downgraded its forecast on the global economy to 3.7 percent for both 2018 and 2019. The number is the same as last year’s 3.7 percent growth.

Global trade for this year was also less optimistic compared to July's expectations, and it was revised 0.6 percent lower to 4.2 percent, lower than the 5.2 percent last year.

The IMF expects a 2.9 percent growth outlook on the US economy, but thinks growth will shrink to 2.5 percent for 2019, attributing to the slowdown to the country’s escalating trade war with China.

For China, economic growth outlook was maintained at 6.6 percent, but the IMF shaved the growth prediction for next year to 6.2 percent, which will make it the slowest growth rate for the country since 1990.

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