The International Monetary Fund (IMF) is warning of a “delicate moment for the world economy” as it predicts a slowdown in global growth, however the outlook for Latin America and the Caribbean is cautiously optimistic with economists forecasting growth rates of 1.4 per cent in 2019 and 2.4 per cent in 2020.

Released earlier this week, the IMF’s World Economic Outlook downgrades its previous 3.5 per cent global growth forecast to 3.3 per cent. The Fund attributes this slowdown to trade tensions between the US and China, as well as macroeconomic stress in Argentina and Turkey and tighter credit policies in China.

Around 70 per cent of the global economy will experience a decline in 2019, according to the IMF, which reports that the outlook for many countries is “challenging”.

IMF chief economist Gita Gopinath said: “Global expansion continues to weaken. We expect a recovery in 2020. However, we do see significant downside risks. A major risk continues to be trade tensions. We are concerned that trade tensions could escalate and show up in other sectors which could be very damaging for global growth.”

“It’s very important that policymakers do no harm and work cooperatively to reduce the high levels of uncertainty in the world, especially with regard to trade policy. It’s also very important that macro-prudential tools are used in place to make sure the financial risks are not building up, and fiscal policy will have to manage important trade-offs between demand growth and at the same time making sure that the debt remains sustainable.”

The economy is set to stabIlise beyond 2020 however, boosted by growth in China and India. Emerging markets and developing economies such as those in Latin America and those in the Caribbean region are expected to expand by around 5 per cent over the long-term, according to the IMF.

In the Caribbean region, real GDP is predicted to increase by 3.6 per cent this year and 3.7 per cent in 2020 – a slight decrease from the 4.7 per cent GDP expansion seen in 2018.