Tax Cuts

This blog post was not written by Michael Berookim and does not reflect the opinions of Michael Berookim.

In an updated economic forecast presented at the recent World Economic Forum held in Davos, Switzerland, the International Monetary Fund (IMF) said that it anticipates global economic growth of 3.9 percent through 2019. This is an increase from the 3.7 percent forecasted in October 2017.

The IMF based its updated growth forecast, in part, on the recent Trump administration tax cuts, which it believes will benefit U.S. trade partners that provide raw materials, goods, and machinery to the United States.

The IMF also updated its forecast for U.S. domestic economic growth from 2.3 percent to 2.7 percent for 2018. The forecast for 2019 was also upgraded from 1.9 percent to 2.5 percent for 2019. Starting in 2022, the IMF predicts that U.S. economic growth will be lower than previously forecasted as the next administration attempts to reduce the deficit and the temporary tax write-offs for business investments expire.

The continued upswing in the global economy that started in 2016 also contributed to the upgraded forecast. The economic growth of 120 countries was higher than expected in 2017. In addition to the United States, economic growth was especially strong in Japan, Germany, Korea, Brazil, South Africa, and China.