DAVOS, Switzerland (Reuters) - The International Monetary Fund on Monday revised up its forecast for world economic growth in 2018 and 2019, saying sweeping U.S. tax cuts were likely to boost investment in the world’s largest economy and help its main trading partners.Of course, they had to throw some anti-Trump BS in there
However, the IMF, in an update of its World Economic Outlook, also added that U.S. growth would likely start weakening after 2022 as temporary spending incentives brought about by the tax cuts began to expire. . . .
U.S. President Donald Trump signed Republicans’ massive $1.5 trillion tax overhaul into law in December, cementing the biggest legislative victory of his first year.It's only temporary if the Democrats won't agree to renew it.
The tax package, the largest such overhaul since the 1980s, slashed the corporate rate from 35 percent to 21 percent and temporarily reduced the tax burden for most individuals as well.
Pointing to growth in the United States and China, the IMF forecast global growth to 3.9 percent for both 2018 and 2019, a 0.2 percentage point increase from its last update in October.With minor exceptions, what's good for the US is good for the world.
The U.S. economy has been showing steady but underwhelming annual growth since the last recession in 2007-2009. The IMF now expects it to expand by 2.7 percent in 2018, much higher than the 2.3 percent the fund forecast in October. U.S. growth was projected to slow to 2.5 percent in 2019, it said.
The IMF also revised up its growth forecasts for the euro area, especially for Germany, Italy and the Netherlands “reflecting the stronger momentum in domestic demand and higher external demand”.