Experts at the International Monetary Fund (IMF) released a report predicting that global growth will accelerate to the fastest pace in seven years, citing the recently passed GOP tax bill as partially responsible.
The IMF raised its forecast for international growth to 3.9 percent for 2018 and 2019, an increase of 0.2 percentage points from its October prediction. If the growth meets the IMF’s expectations, those two years would be the largest years of growth since 2011.
Roughly half of the IMF’s increased expectation comes from the Republican tax bill passed in December, according to Bloomberg. The slashed corporate tax rate will serve as a growth catalyst, increasing U.S. growth to 2.7 percent for 2018 — 0.4 points higher than the IMF’s initial analysis.
However, not everything in the forecast was rosy, the IMF also asked policymakers to be on the watch for a recession, which it said could hit quicker than expected.
“The next recession may be closer than we think, and the ammunition with which to combat it is much more limited than a decade ago,” IMF chief economist Maurice Obstfeld said at a Davos briefing.
The IMF’s report comes in the midst of a number of American companies pledging to give raises to workers and invest domestically.
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