IMF expects a better growth rate for the world for both 2018 and 2019.
International Monetary Fund just declared that they are expecting the global economic growth in the present and upcoming year is to grow to 3.9%. They believe that the recent tax reductions announced by one the most developed economies of the world. The United States will have a positive impact on the global investment.
However in its economic report published recently, IMF warned that this investment initiative by the traders will start fading by 2022 as the impact of tax reduction will start decreasing by this time. As per the chief economist of International Monetary Fund, Maurice Obstfeld, the tax cuts will broaden the financial deficit of the US economy; increase the value of US dollars in the world market and boost investment throughout the world.
In December last year, just within one year of his rule, President Donald Trump signed a 1.5 trillion US dollars tax overhaul deal, recommended by the Republicans; he considered this as one of his biggest achievements in this financial year.
This was the largest overhaul of its kind since 1980s and led to a drastic reduction in corporate rates from 35% to 21%. This was extremely good news for the US citizens as they lost much of the tax burden just the eve of Christmas and New Year. Till date the IS economy was growing but at a slow rate, which seems to be the effect of the recession which took place between 2007 and 2009; the US economy alone is expected to grow by 2.7% in2018.
The forecast of 3.9% by IMF was a 0.2% change from its forecast which was made in October 2017. Besides the tax reforms by the United States, the strong economic activity going on at Asia and Europe are also considered responsible for the 3.9% forecast.