IMF downgrades growth forecasts for US and UK economies

The International Monetary Fund (IMF) has predicted US and UK economies will experience weaker-than-expected activity and expand more slowly this year than previously predicted.

According to the IMF’s latest report, the weaker-than-expected activity in the first quarter of 2017 means the British economy would grow or expand just 1.7 per cent this year. Previously, the British economy was predicted to expand at rate of 2 per cent.

The US economy has been predicted to grow 2.1 per cent, down from the previously predicted growth rate of 2.3 per cent.

Maurice Obstfeld, chief economist for the IMF, said they were watching closely the impacts of Brexit on the future economic health of UK.

Speaking on the topic, Obstfeld said, “We have long predicted that Brexit would have some negative long-term effects, but in the case of this year's forecast [downgrade] we are basing it purely on the observation of data for the first part of this year which has been weaker than expected.”

However, a spokesperson for the UK Treasury argued that the rate of employment is at a record high and the deficit is down by three quarters, indicating that the fundamentals of the British economy are strong.