Washington, .- The managing director of the International Monetary Fund (IMF), Christine Lagarde, warned today of the “delicate moment” that lives the global economy before the loss of “impetus”, so it advanced a downward revision of the forecasts of global growth.
“Only two years ago, 75% of the world economy experienced a rebound, and this year, we expect 70% of the global economy to experience a slowdown,” Lagarde said at a conference at the Chamber of Commerce in Washington.
“In January, the IMF projected world growth for 2019 and 2020 of around 3.5%, lower than we have seen in recent times (…) Since then, growth has continued to lose momentum,” he explained. a week before the institution publishes its new global forecasts in the framework of its joint spring meeting with the World Bank (WB) in Washington.
However, the Fund’s top executive stressed that there is no
he observes “a short-term recession”, just as markets have begun to be shuffled by the weakness of some of the latest macroeconomic data in the United States and Europe.
In fact, he considered that “global activity is expected to benefit from a more patient monetary normalization rhythm in the main central banks, led by the US Federal Reserve (Fed), and by a greater stimulus in China”, but qualified that this rebound will be “precarious”.
After four rises in interest rates in 2018, the Fed has ruled out further adjustments in the remainder of 2019 before the global slowdown and the European Central Bank (ECB) has also indicated that it will take longer than expected to carry out a rise in the price of money
The central bank, in addition, lowered the growth forecasts of the world’s leading economy for 2019 from 2.3% to 2.1%, confirming the slowdown trend in the country after registering a growth rate of 2%. , 9% last year.
Likewise, China has lowered its expansion expectations this year to between 6% and 6.5%, which would be the lowest rate in more than two decades in the Asian giant.
For Lagarde, the greatest risk is the vulnerability and uncertainty that surrounds the global economy with commercial tensions, unrest in financial markets and doubts about the “Brexit”, as it is known at the exit of the United Kingdom from the European Union ( EU).
He reiterated his criticism of the protectionism unleashed by the aggressive agenda of economic nationalism of the president, Donald Trump, with the trade dispute between the United States and China, which has led to the increase of tariffs on hundreds of Chinese products and similar reprisals by Beijing. .
“We know that trade barriers are not the answer (…) These are wounds that can self-inflict and should be avoided,” said Lagarde, who claimed the economic benefits of greater trade integration.
To do this, he gave as an example that, according to the calculations of the Fund, if the tariffs on all goods exchanged between the United States and China increased by 25 percentage points, annual GDP would be reduced by 0.6% in the United States and by 1%. 5% in China.
“Nobody wins a commercial war,” he recalled.
Currently, Washington and Beijing are engaged in complex negotiations to try to reach a comprehensive trade agreement, something that has generated concern in global financial markets.
During its meeting next week in the US capital, the IMF and World Bank will bring together the main economic leaders of its 189 member countries to analyze global challenges and threats. (EFEUSA)