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16 Oct 2019
1 min read

IMF Predicts Slow Economic Growth for 2019

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Written by OspreyFX News Team

Only a 2.4% growth in US economy expected

The International Monetary Fund (IMF) has published its long-awaited report on the “Global Economic Outlook” about the performance of the economy at a global level. Latin America was one of the hardest hit in the body’s opinion, but the focus was also on the United States.

It is no secret that the trade war has been damaging the parties involved in certain ways, especially China. In the report, it was noted that only a 2.4% growth in the US economy is expected. “The economy maintained momentum in the first half of the year. Although investment remains slowed, employment and consumption remain strong,” the report said.

Although the trade dispute between the US and China is not the direct catalyst behind the economic slowdown in the United States, the IMF noted that the uncertainty generated by the conflict has generally slowed investment.

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Measures recommended by the IMF

Given these conclusions, the report presented a series of measures that the United States can apply to address these issues. Among them is the option to implement a tax on carbon emissions, apply a federal consumption tax and also impose a federal tax on gasoline. All this with the understanding that the economy, according to the IMF, should have a gradual consolidation.

The report goes on to say that “low inflation and pressure on wages have given room (to the US central bank) to protect the economy against downside risks from the global economy.” This is the first official opinion issued by the IMF since the Bulgarian, Kristalina Georgieva, assumed the position of Managing Director at the institution.

IMF cuts its 2019 economic growth projections

Technical outlook for EUR/USD after the IMF report

The pair remains steady at around the 1.1033 level, and keeping a wait-and-see stance while Brexit and trade wars develop is still the key driver behind the US dollar. If it breaks above 1.1050, then it could rally towards the highs of September at 1.1109.

On the flip side, if EUR/USD drops below the psychological zone of 1.1000, the next hurdle to overcome would be the 1.0950 area.