Global economy: IMF cuts China outlook; PMIs put growth in slow lane

Credit: Reuters - Business (Amazon FireT
Published on June 5, 2019 - Duration: 01:30s

Global economy: IMF cuts China outlook; PMIs put growth in slow lane

The IMF has cut its 2019 economic growth forecast for China to 6.2% on heightened uncertainty around trade frictions.

And, as David Pollard reports, new PMI surveys show global growth still struggling to gain speed.

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Global economy: IMF cuts China outlook; PMIs put growth in slow lane

(SOUNDBITE) (English) KENNETH KANG, DEPUTY DIRECTOR OF THE ASIA AND PACIFIC DEPARTMENT, SAYING: "Growth is expected to moderate to 6.2 percent and 6.0 percent in 2019 and 2020, respectively ....." More words of warning on China on Wednesday.

This time from the IMF as it cut its outlook the world's number 2 economy.

It's a turnaround from two months ago when the IMF upgraded its view on prospects which then were brightening.

Unlike those now.

(SOUNDBITE) (English) KENNETH KANG, DEPUTY DIRECTOR OF THE ASIA AND PACIFIC DEPARTMENT, SAYING: "The near-term outlook remains particularly uncertain given the potential for further escalation of trade tensions." Tensions with the U.S., that is, it's raised tariffs on hundreds of billions of dollars of Chinese imports and threatens to do the same on more.

On the plus side, the IMF had positive comments about China's policy and stimulus response - 'though extra might be needed, it says, if tensions do escalate.

But the report came just as China's importer were disclosed as applying for waivers on import tariffs for more than 700 U.S. goods.

Applicants must show the tariffs cause 'serious economic damage.'

Meanwhile, growth in China's services eased in May on slower exports, according to a PMI survey.

And, as regards collateral damage, euro zone business activity barely picked up last month, according a PMI survey there.

The damage in Britain is, indicates its PMI survey, mostly related to Brexit uncertainty.

Readings show growth there almost ground to a halt last month.

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