**MNI 5 POINTS: IMF WEO: Global Growth Still 3.9%; Trade Risks

--5 Things We Learned From The July WEO Update

By Kevin Kastner

     WASHINGTON (MNI) - The International Monetary Fund issued the July update

to their World Economic Outlook Monday. The update shows no change to their

global growth pace or US growth pace, but did cut their growth rates for the

Euro Area and the UK. The IMF also cited downside risks due to trade issues. 

     Here are the key points from July WEO update:

     -The IMF kept the global growth pace at 3.9% for both 2018 and 2019, the

same as they reported in the April WEO release, but they noted that the

expansion is becoming less even when comparing the US with other developed

countries in Europe and Japan

     -The IMF noted that balance of risks to global growth have moved even

further to the downside, both in the short and medium term. A key concern is the

tariff increases announced by the US and the accompanying measures that are

expected in retaliation from trading partners. The IMF said these measure could

"derail the recovery and depress medium-term growth prospects." 

     -The WEO update left their US growth pace forecast at 2.9% for 2018 and

2.7% for 2019, and noted that the US dollar continues to appreciate. The IMF

noted that strong fiscal stimulus and private final demand should drive the US

economy forward and keep the unemployment rate low, but will also raise

inflationary pressures.

     -In contrast, the growth forecast for the Euro area was revised down by

0.2pp to 2.2% for 2018 and by 0.1pp to 1.9% in 2019, with Germany, France, and

Italy all seeing 0.3pp downward adjustments for 2018. Softer first quarter

conditions were noted in Germany and France, while Italy's growth pace was

revised down because "wider sovereign spreads and tighter financial conditions

in the wake of recent political uncertainty are expected to weigh on domestic

demand."

     -The growth forecast for the United Kingdom was revised down 0.2pp to 1.4%

for 2018 and was unchanged at 1.5% for 2019. Growth estimates for Japan were

revised down 0.2pp to 1.0% for 2018 and kept a 0.9% for 2019. At the same time,

two large trading partners with the US--Canada and China--saw no revisions to

their growth forecasts for 2018 and 2019. 

--MNI Washington Bureau; tel: +1 202-371-2121; email: kevin.kastner@marketnews.com

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