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IMF says Brexit will drag down world economic growth

Britain’s decision to leave the European Union will reduce global economic growth this year and next, the International Monetary Fund said recently. The IMF  that it is shaving its estimate for worldwide growth to 3.1 percent this year and 3.4 percent in 2017. Both estimates are 0.1 percentage points lower than the bank’s previous forecast in April. IMF chief economist Maurice Obstfeld said the bank was prepared “as of June 22” — the day before Britain’s vote — to slightly mark up its global forecast, citing unexpectedly strong growth in Europe and Japan and a partial rebound in global commodity prices. “But Brexit has thrown a spanner in the works,” Obstfeld said. Britain must now renegotiate its trade relationship with Europe, creating uncertainty that could erode consumer and business confidence and freeze investment. The world’s two biggest economies — the United States and China — are unlikely to sustain much damage from the tumult in Europe, the IMF said.

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