Trade disputes and tighter financial conditions are among the top threats to a slowing world economy, global finance officials said on Saturday, urging countries to take steps to shore up growth.
The global expansion, now seen at its most sluggish pace in three years, is likely to firm up next year, but central banks and fiscal authorities have limited policy options to drive a rebound, officials said in the joint communique of the International Monetary Fund’s steering committee.
“While we expect to see a pickup (in growth) next year, trade tensions, geopolitical risks, political instability are among the challenges,” Lesetja Kganyago, the committee’s chairman and the South African Reserve Bank’s governor, said at a press conference after the panel adjourned its semi-annual meeting.
“We agreed we need to act promptly to protect the expansion.”
“Fiscal policy for example should remain flexible and growth-friendly, rebuild buffers, and strike the right chord between debt sustainability and supporting demand,” Kganyago said, capping the spring meetings of the IMF and World Bank in Washington.
The sober mood among finance leaders at the meetings this week was a stark contrast to the optimism that characterized the gathering one year ago when officials were heralding a rare period of robust and synchronized growth.
This week’s proceedings kicked off with the IMF cutting its global growth outlook for the third time in six months. The world economy will likely grow 3.3 percent this year, the slowest expansion since 2016 and 0.2 percentage points below the global lender’s estimate from January…Continue Reading