The IMF downgraded the outlook for the global economy due Brexit – RBC

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The IMF downgraded forecast for global economic growth for the fifth time in 15 months. Reducing the evaluation due to the uncertainty around the exit of Britain from the EU, as well as the worsening economic and political risks

Before the vote on Brexit International Monetary Fund planned to significantly improve the prognosis of growth of global GDP on the back of higher-than-expected indicators of real activity China’s economy, as well as slowing down the recession Brazil and the Russian economies. However, after the referendum, the IMF downgraded its estimate for global GDP growth – for the fifth time in 15 months

According to the published fund the July bulletin “World Economic Outlook”, a moderating influence on global GDP growth will have uncertainty around the exit of Great Britain. EU, as well as the aggravation of other risks -. economic, political and geopolitical

The Fund lowered its baseline forecast of world economic growth for 2016 and 2017 by 0.1 percentage points compared to April – up to 3.1% and 3.4% respectively. The outlook revision, among other things, due to the risk Brexit, including “a substantial increase in the economic, political and institutional neo bution”, which is expected to have a negative macroeconomic consequences, especially in the European countries with developed economies. The IMF expects that “this uncertainty have a negative impact on confidence and investment, including through its impact on the financial situation and more generally – on market sentiment».

The prospects worsen for developed economies (in 0.1 percentage points in 2016 and 0.2 percentage points in 2017), whereas for emerging market and developing countries as a whole, they remain unchanged, according to the forecast. Among advanced economies, the most reduced growth forecasts for the United Kingdom – to 1.7% in 2016 and to 1.3% in 2017. Prediction Fund is based on the assumption that the United Kingdom and the European Union will conclude a new trade agreement, in order to “eliminate barriers to economic growth” between the block and the kingdom. Moreover, if the negotiations run anything, UK will slip into recession, predicts the fund. This will contribute to the outcome of the country’s financial institutions that will carry your business to the euro area, as well as more significant than expected reduction in consumption and investment, the fund said. “The real effects of Brexit show up with the times”, -. Bloomberg leads comment IMF chief economist Maurice Obstfeld

Brexit The consequences affect mainly on the developed economies of Europe, whereas the effect of the release of the UK unit to other countries including the US and China, will be limited, forecasts the IMF. In 2016, the eurozone economy will grow by 1.6% (forecast improved by 0.1 percentage points), the United States – 2.2%, China – 6.6%, according to a bulletin

According to the IMF experts, in addition to Brexit risks more pronounced become other risks: long-term problems in the European banking system, particularly in the bank of Italy and Portugal, “destabilizing adjustment” of the Chinese economy, based on credit as the driving force of growth, risks to financial stability in the countries emerging market.

The essential origin remains non-economic risks, the IMF said. Political differences in the advanced economies may impede the long-term solution to the structural problems and the refugee problem. Obvious threat is a transition to a protectionist policy. Geopolitical tensions, armed conflicts and terrorism have a strong negative impact on the prospects for the Middle East. Economics of the Middle East, North Africa, Afghanistan and Pakistan will grow by 3.4% in 2016, predicts the IMF

Due to the rise in oil prices Fund forecasts a smaller decline in GDP of Russia:. -1.2% In April 2016 against -1.8% in the assessment. In 2017, the Fund is waiting for Russia’s economic growth by 1%. Prospects for the acceleration of the Russian economy are limited due to long-term structural problems and the impact of sanctions on productivity and investment, the document says.