Prof. Mas at IREPAS: IMF revises down GDP growth forecast

Monday, 08 April 2019 17:14:57 (GMT+3)   |   Istanbul

During her speech at the SteelOrbis 2019 Spring Conference & 80th IREPAS Meeting held in Barcelona on April 7-9, Professor Nuria Mas, head of the economics department at IESE Business School, said that the IMF has revised down its global GDP growth forecast, with 3.5 percent for 2019 and 3.6 percent for 2020, adding that emerging economies are dominating the GDP growth. Prof. Mas said that the US economy is expected to grow by 2.5 percent in 2019, with growth continuing to slow down but still at decent levels. She went on to say that the EU is doing much worse than previously anticipated, with three large economies, namely, Germany, France and Italy, slowing down.

Prof. Mas stated that the key elements to watch are Brexit, trade wars, volatility in emerging economies and obviously China. She also pointed out that US President Trump is decreasing corporate tax and this increases investment in the US, stimulating the economy. However, what he is doing means that he is actually increasing debt. The US fiscal deficit as a percentage of GDP will be 4.6 percent this year, the largest ever in a non-recession year.

Commenting on Brexit, Prof. Mas said that, in the event of a hard Brexit, i.e., without a deal and a transition period, the Bank of England has warned that the UK will lose 10 percent of potential GDP it would otherwise have. She also recalled that the UK has trade agreements with 50 countries via the EU. In case of a no-deal Brexit, they will need to renegotiate these agreements.

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