Global economy likely to see slow, if any, growth, outside pockets like U.S.
The International Monetary Fund cut its global growth outlook even further on Tuesday. The IMF already had global growth rates at their lowest level since the financial crisis. This is the fourth time in a row that such expectations have been cut.
The IMF suggested that policy issues on trade and Brexit could weigh on a potential economic rebound, in line with suggestions from other key players in the global financial markets.
Overall, the IMF expects the global economy to expand by a mere 3.2 percent in 2019, down from 3.6 percent in 2018. Its most recent growth forecast was 3.3 percent.
Looking at specific countries, the IMF forecasts a 6.2 percent growth rate for China, the lowest rate since 1990 when China faced international sanctions following the Tiananmen Square massacre. The IMF boosted the expected growth rate for the U.S., based on the expectations of interest rate cuts later in the year.
Action to take: Investors should review their international allocations and rebalance away from riskier markets that may see slower growth. The strong U.S. dollar, and weak market action abroad have already suggested the U.S. as one of the safer parts of the world to invest in for the foreseeable future, rate cuts or not.