The International Monetary Fund (IMF) has cut its growth forecast for the British and American economies, saying they will expand more slowly in 2017 than previously predicted.
According to the IMF report, the UK will grow by 1.7 percent compared with a previous two percent forecast due to “weaker-than-expected activity” in the first three months of the year.
For 2018 it left the forecast unchanged at 1.5 percent, saying “the ultimate impact of Brexit on the United Kingdom remains unclear.”
The US outlook for this year was revised down from 2.3 percent to 2.1 percent.
“While the markdown in the [US] 2017 forecast reflects in part the weak growth outturn in the first quarter of the year, the major factor behind the growth revision, especially for 2018, is the assumption that fiscal policy will be less expansionary than previously assumed, given the uncertainty about the timing and nature of US fiscal policy changes,” the IMF said.
US growth for next year is now predicted to come in at 2.1 percent, instead of the 2.5 percent previously forecast.
The growth outlook for several eurozone economies including France, Germany, Italy and Spain was revised up.
Overall global economic growth predictions stayed unchanged, at 3.5 percent in 2017 and 3.6 percent in 2018.
“The recovery in global growth we projected in April is on a firmer footing; there is now no question mark over the world economy’s gain in momentum,” said IMF Economic Counselor Maurice Obstfeld.
Some economists, however, warn that IMF forecasts are not always right.
“The IMF, a multilateral institution, takes a step back and looks at a broad range of activities across the world, but they do sometimes get things wrong, and we wouldn’t want to put too much emphasis on what’s been released today,” Lucy O’Carroll, chief economist of Aberdeen Asset Management told the BBC.