The International Monetary Fund announced on Monday that it expects global economic growth to be greater than first predicted — and the Republican tax reform bill that passed at the end of 2017 is largely to blame.
According to Bloomberg, the IMF has “raised its forecast for world expansion to 3.9 percent this year and next, up 0.2 percentage point[s]” from previous predictions. That is the fastest growth rate, the business media outlet points out, since the end of the previous “great recession” in 2011.
The IMF is warning global economic powerhouses like the United States that the spike is fickle, and that pro-growth policies must continue in order to solidify continued economic expansion.
The Trump tax cuts, which passed late last year, are “about half” of the reason the IMF upgraded its economic prediction. The United States economy is expected to grow significantly because of the reform package, which is already luring companies back to American shores, and the IMF anticipates that even their earlier prediction of 2.7% growth will be a little short.
A rising tide in the U.S., they say, spells good news for economies across the globe.
The IMF did warn President Donald Trump, however, that too much trade protectionism could change that outlook and that American lawmakers will have to act again in 2022 after the current tax reform plan expires, to prevent backsliding.
This is great news for President Donald Trump who will make an appearance later this week at the World Economic Forum in Davos, Switzerland. He’s already going in as an outsider — the Forum has more than its share of progressives who mourned Trump’s Presidential win in 2016 — and there was some fear among White House insiders that global economic leaders might use Trump’s anti-trade agenda against him.
They might have a harder time doing that now.
