Global Economic Growth Will Be Lower Because of Brexit Vote, IMF Says

The unexpected vote creates "substantial" uncertainty and will harm growth.

— -- The global economy faces “a wave of uncertainty” in the wake of the United Kingdom’s referendum to leave the European Union, and for that reason, the International Monetary Fund (IMF) has cut its forecast for global growth -- saying world economies will grow by 3.4 percent next year.

In April, the IMF projected that growth would be 3.5 percent, but said that the vote, commonly called Brexit, “caught financial markets by surprise,” and creates “a substantial increase in economic, political, and institutional uncertainty,” and thus necessitated lowering the projection.

“Brexit has thrown a spanner in the works,” said Maurice Obstfeld, IMF Chief Economist and Economic Counselor, using the British word for a wrench.

Had the vote gone the other way, the IMF said it would have actually revised April’s forecast upward by 0.1 percent.

The good news is that the United States should be minimally affected, according to the fund.

“The impact of Brexit is projected to be muted for the United States,” the report said.

The U.S. economy is projected to grow by 2.2 percent in 2016 and 2.5 percent in 2017, according to the report.