International Monetary Fund warns of Asia's darkening growth outlook as trade war bites

Monday, 21 Oct, 2019

"Trade tensions are now taking a toll on business confidence and investment", IMF Managing Director Kristalina Georgieva said.

New IMF managing director Kristalina Georgieva on Thursday said that a trade truce between the United States and China could trim expected losses to the world economy, but would not be enough to produce strong global growth.

Top economic officials from the IMF's 189 member countries and its sister institution, the World Bank, are meeting in Washington from October 18-20 to discuss problems such as economic inequality and automatisation of the labour force.

Trade is typically an engine of economic growth.

The IMF's managing director, Kristalina Georgieva, cited the fallout from a variety of factors: the U.S.

The new International Monetary Fund leader told reporters strengthening multilateral cooperation was one of her top priorities, a subtle jab at the United States, the IMF's largest shareholder, which has pulled back from many other multilateral agreements on trade, climate and other key issues.

IMF officials are expected to meet with officials from Argentina during the IMF/World Bank annual meetings in Washington this week, but sources familiar with the issue said no decision was expected on the release of the next US$ 5.4 billion tranche of the IMF facility.

Treasury Secretary Steven Mnuchin said US trade policies, which have included tariffs on billions of dollars of imports from China and other nations, are meant to improve the rules for global trade.

Before last week's tentative trade agreement, the International Monetary Fund had estimated that higher trade tariffs would mean eight-tenths of a percentage point of lost economic input by the end of next year.

US Treasury Secretary Steven Mnuchin said at the IMF's spring meetings in April that the United States opposes increasing overall funding and shareholding quotas. -China trade agreement, and an agreement reached by London and Brussels about Britain's departure from the European Union, would ease uncertainty that has been weighing on global markets.

"We all know that we have been reaching agreements on trade based primarily on the past, but you can not drive just looking in the rearview mirror". -China trade agreement announced last week by President Donald Trump should lessen slightly the damage done by the trade war - but until the two nations resolved their differences, it would not remove enough uncertainty to return the globe to solid growth.

However, besides promises to more than double purchases of American farm products, details of the accord remain scarce.

China is "willing to work together with the United States to address each other's core concerns on the basis of equality and mutual respect", Liu said, according to a report on Taoran notes, a social media account run by the Beijing's official Economic Daily.

"So the recommendation that we always give is that countries should strive for 15% of GDP in terms of collection to fund the responsibilities of the government and in Nigeria, this is still quite far".

Slower growth in industrial production has hurt global trade.

E-commerce was not easily regulated in current trade agreements and services were often not covered, she said.