Vitas Vasiliauskas: IMF projects slower global growth this year – recovery is still to come
Attending the Spring Meetings of the International Monetary Fund (IMF) and the World Bank held in Washington, DC, this week, Vitas Vasiliauskas, Chairman of the Board of the Bank of Lithuania, will discuss economic headwinds determining weaker than anticipated economic growth and the latest IMF macroeconomic forecasts.
‘The IMF projections for global economic growth have been revised downwards since the beginning of the year, partly reflecting ongoing international trade tensions. A more moderate outlook for growth is projected for the euro area as well. This is worrying from the perspective of Lithuania’s economy, since it is largely dependent on the economic situation in our trading partners,’ said Vitas Vasiliauskas, Chairman of the Board of the Bank of Lithuania.
Compared with the January projections, the global growth outlook for 2019 has been revised down to 3.3% (0.2 percentage point lower). The euro area economy is projected to grow by 1.3% (0.3 percentage point weaker than previously anticipated). The growth forecast for this year for Lithuania remains unchanged: the economy is set to grow by 2.9%. For Latvia and Estonia, the growth rate in 2019 is forecasted at 3.2% (-0.1 percentage point) and 3.0% (-0.2 percentage point) respectively. In Germany, which one of the main Lithuania’s export markets, economic growth in 2019 is expected to decline to 0.8% (a downward revision of 0.5 percentage point). This year’s economic growth forecast for the neighbouring Poland is revised upwards to 3.8% (0.3 percentage point higher than previously projected).
According to the latest IMF projections, in 2020, global growth is expected to rise to 3.6%, the euro area’s economy is set to grow at 1.5% (-0.2 percentage point), Lithuania’s – at 2.6% (‑0.1 percentage point), Latvia’s – at 3.1%, Estonia’s – at 2.9% (-0.1 percentage point) and Germany’s – at 1.4% (-0.2 percentage point). Next year, the growth of Polish economy is projected to accelerate to 3.1% (+0.1 percentage point).
The Chairman of the Board of the Bank of Lithuania is a member of the Board of Governors of the IMF. Twice a year he participates in meetings organised by the IMF, where governors of central banks as well as finance ministers discuss relevant economic issues and look for ways to accelerate economic growth.
During his visit to Washington, DC, Mr Vasiliauskas will attend meetings of the IMF International Monetary and Financial Committee, the Nordic-Baltic Constituency and a series of bilateral meetings. He will also deliver a speech on central bank digital currencies at the ‘Reinventing Bretton Woods Committee’ conference ‘Managing the Soft Landing of the Global Economy’.