Maelstrom & Depression
Christine Lagarde, the Managing Director of the International Monetary Fund (IMF), has advised the major governments to be prepared to tackle a major global economic storm in the coming days.
Speaking at the World Government Summit in Dubai, she recently said that the global lender predicted a possible economic storm as growth undershot. “The bottom-line – we see an economy that is growing more slowly than we had anticipated,” Lagarde told the audience.
It is to be noted that the IMF lowered its global economic growth forecast from 3.7% to 3.5% for 2019 in the month of January! According to Lagarde, the global economy is facing threats from four quarters, which could trigger the storm. She claimed that “trade tensions and tariff escalations; financial tightening; uncertainty related to the Brexit outcome and spill-over impact; and an accelerated slowdown of the Chinese economy” might have a great impact on the global economy.
Meanwhile, the IMF chief expressed serious concern over trade tensions between China and the US, saying that the tariff spat were already having a global impact and the world’s two biggest economies should try to resolve the issue as soon as possible. “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,” stressed Lagarde. She made clear that both Washington and Beijing would have to avoid protectionism.
The IMF boss was also worried about the risks posed by rising borrowing costs within a context of heavy debt obtained by governments, firms and households. “When there are too many clouds, it takes one lightning (bolt) to start the storm,” insisted Lagarde.
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