IMF warns for global "economic storm"
IMF Managing Director has warned governments about an approaching global economic storm as growth undershoots expectations
Speaking at the World Government Summit in Dubai, IMF Managing Director Christine Lagarde said that economic growth around the world is slower than anticipated. Last month, the IMF lowered its global economic growth forecast for 2019 from 3.7 percent to 3.5 percent.
Lagarde mentioned "four clouds", undermining the global economy and warned that a "storm" could be caused due to these factors. "Trade tensions and tariff escalations, financial tightening, uncertainty related to the Brexit outcome and spillover impact and an accelerated slowdown of the Chinese economy", Lagarde said, also warning governments to avoid protectionism.
Lagarde further talked about trade tensions between the US and China, saying that tensions between the world´s biggest two economies are already having a global impact. "We have no idea how it is going to pan out and what we know is that it is already beginning to have an effect on trade, on confidence and on markets," she said.
Lagarde also touched on the risks posed by rising borrowing costs within a context of "heavy debt" racked up by governments, firms and households. "When there are too many clouds, it takes one lightning bolt to start the storm," she said.