It said that the main factor behind its downward revision for US growth in 2018 was “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”.
“Market expectations of fiscal stimulus have also receded.”
President Donald Trump’s administration had been widely expected to pursue policies including tax cuts and infrastructure investment to try to boost the US economy.
However, the chances of Trump’s administration being able to push through these policies now appears less likely.
The IMF’s outlook for several eurozone economies was brighter than initially thought, with countries including France, Germany, Italy and Spain seeing growth forecasts revised up.
The biggest eurozone revisions were for the Spanish and Italian economies. Spain is now forecast to grow 3.1% in 2017, up from the previous prediction of 2.6%. Italy’s 2017 growth forecast has risen from 0.8% to 1.3%.
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