IMF: growth spurt nearing its end

THE world’s economic growth spurt is almost at an end, the International Monetary Fund (IMF) warned as it slashed growth forecasts for most of the developed economies.

As a result, overconfident markets could turn from boom to bust, raising the risk of a downturn. Global gross domestic product growth should hit 3.9pc this year, up from 3.7pc in 2017, but will plateau at that level before falling back in the years to come, it said.

Parts of the developed world are already past their peak. The IMF downgraded growth expectations in the eurozone, UK and Japan, meaning all three will grow more slowly this year than in 2017.

Even the US, which is powering much of the current expansion with its 2.9pc growth spurt this year, will fail to match it in 2019. This is because its long cyclical recovery is coming to a natural end, while the effect of tax cuts will wane and higher interest rates will slow growth, the IMF said.

At the same time, the trade war will harm the global economy.

“Asset prices are no doubt buoyed not only by easy financial conditions, but by the generally still satisfactory global growth picture,” the IMF said, adding that markets seem “complacent”.