The IMF just cut its global growth forecast for 3rd time in 2019 saying "risks to the forecast are mainly to the downside."
Global growth has been slowing since January 2018... and the IMF has been perpetually late to this global #GrowthSlowing party.
Here's what the IMF was saying in their January 2018 "World Economic Outlook Update" just before global growth began to slow.
IMF (January 2018): "Global economic activity continues to firm up."
- IMF raises its growth forecast: "Global growth forecasts for 2018 and 2019 have been revised upward by 0.2 percentage point to 3.9 percent."
- "The revision reflects increased global growth momentum."
IMF (July 2019): "Global growth remains subdued."
- IMF cuts its growth forecast: "Global growth is projected at 3.2 percent for 2019, improving to 3.5 percent in 2020 (0.1 percentage point lower for both years than in the April 2019 WEO forecast)."
- "Risks to the forecast are mainly to the downside."
BRING OUT THE DOVES
We've been warning about global growth slowing since January 2018 (see image below from our Q1 2018 Macro Themes published on January 4th, 2018).
While the IMF has been way behind curve, the global growth slowdown hasn't gone completely unnoticed.
Central bankers around the world have almost uniformly responded to global growth slowing by easing monetary policy...
- 2018: Central banks of top 50 global economies tighten monetary policy a net +2175bps.
- 2019 (YTD): Central banks of top 50 global economies ease monetary policy a net -225bps.
Fed Chair Jerome "PE" (Private Equity) Powell might have said it best: "Momentum appears to have slowed in some major foreign economies and the weakness could spread to impact a U.S. economy that’s currently on a solid footing.”
We're not so sure about that last part (i.e. the U.S. being on "solid footing") but the trend in global growth is now crystal clear for investors and policymakers who were betting on a "globally synchronized recovery" right at the top of the global growth cycle.