Uncertainty in the aftermath of Britain’s vote in June to leave the European Union carries serious risks for the global economy, a report published this morning by the International Monetary Fund warns.
Brexit-related slowdowns will mostly affect EU economies, particularly Britain, the IMF analysis predicts. In China and North America the effect will be “relatively muted.”
But the report predicts that Canada’s economic growth (along with the United States) will be strong in 2017 compared to other advanced economies in Europe and Asia.
READ MORE: Bank of Canada says Brexit will trim GDP, holds interest rate
Canada is one of the few major economies whose growth forecast hasn’t been downgraded in the aftermath of Brexit. The other two are the United States and Japan.
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Britain had the sharpest cut in its growth forecast of any country in the IMF’s report.
“The increase in uncertainty following the referendum is projected to significantly weaken domestic demand,” the unsigned report explains.
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Tue., Jul 5: The Bank of England released its first report on the aftermath of the Brexit referendum. Despite a bumpy couple of weeks, the bank’s forecast sounded surprisingly optimistic. Jeff Semple reports.
A more pessimistic scenario is possible, the IMF says, if negotiations between Britain and Europe don’t go smoothly.
“This would reduce consumption and investment more markedly relative to the baseline and lead to a recession in the United Kingdom … As a result, the global economy would experience a more significant slowdown for the remainder of 2016 and 2017 that would be more pronounced in advanced economies.”
READ MORE: Warnings UK headed for recession following Brexit vote
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