IMF sees a weaker global economy but upgrades US forecast

WASHINGTON (AP) — The International Monetary Fund is downgrading its outlook for the world economy because of simmering international trade tensions.

But at the same time, the fund is boosting its forecast for U.S. economy this year, citing expectations that the Federal Reserve will cut interest rates.

The IMF expects the global economy to expand 3.2% in 2019, down from 3.6% in 2018 and from the 3.3% expansion it forecast for this year back in April. The lending organization cited heightened trade tensions and specifically a tariff war between the United States and China.

The fund now expects the U.S. economy to grow 2.6% in 2019, down from 2.9% last year but up from the 2.3% it forecast in April. The U.S. outlook improved as the Fed dropped plans to raise rates.