Newsmax TV & Webwww.newsmax.comFREE - In Google Play
Newsmax TV & Webwww.newsmax.comFREE - On the App Store
Tags: imf | lagarde | trade | business | confidence

IMF's Lagarde: Trade Tensions Threaten Global Economy

IMF's Lagarde: Trade Tensions Threaten Global Economy

Thursday, 19 April 2018 04:25 PM EDT

The head of the International Monetary Fund warned Thursday that the healthiest global economy in years is threatened by rising debt levels, volatile financial markets and a simmering trade dispute between the world's two biggest economies.

IMF Managing Director Christine Lagarde told reporters a U.S.-China trade war "will not be something that will affect only the two countries because the world is so interconnected. It will affect the global economy."

For now, the IMF expects the global economy to grow 3.9 percent this year, the fastest since 2011. But Lagarde says "we are seeing more clouds accumulating on the horizon." She cited trade tensions and rising global debts, which have hit a record $164 trillion. She noted that government debt in advanced economies is at the highest level since World War II.

Lagarde's comments came at a news conference to open the spring meetings of the 189-nation IMF and its sister lending organization, the World Bank.

The three days of talks will also include discussions among the Group of 20 major economies, which account for more than 80 percent of global economic output. The United States is being represented by Treasury Secretary Steven Mnuchin and Federal Reserve Chairman Jerome Powell.

The spring meetings are occurring as the global economy enjoys a broad-based rebound — with most regions recording growth — for the first time since the 2008 financial crisis sent the world into a deep recession.

But Lagarde said the expansion was vulnerable. Stock prices are unusually high but have been battered recently over growing concerns about President Donald Trump's aggressive America First trade policies. The turbulence comes as the Federal Reserve ratchets up U.S. interest rates from the record low levels where they had been in the decade after the financial crisis.

While the Fed has been raising rates at a gradual pace, Lagarde expressed concern about the consequences if the Fed had to accelerate the pace of its rate hikes. A rapid succession of rate hikes could push down stock prices and potentially hurt developing countries that have come to rely on foreign investment, she said.

To guard against these risks, Lagarde called for countries to take advantage of the current good times to reduce their debt, giving them room to ramp to combat a downturn.

She called on all countries "to steer clear of all protectionism measures."

Lagarde did not directly criticize Trump's hardball trade policies. But she urged countries not to abandon seven decades of international cooperation that she credited with "helping to reduce poverty and deliver more progress for more people than at any time in history."

© Copyright 2023 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

The biggest danger from the trade dispute between the United States and China is the threat to global confidence and investment, International Monetary Fund Managing Director Christine Lagarde said on Thursday.
imf, lagarde, trade, business, confidence
Thursday, 19 April 2018 04:25 PM
Newsmax Media, Inc.

Sign up for Newsmax’s Daily Newsletter

Receive breaking news and original analysis - sent right to your inbox.

(Optional for Local News)
Privacy: We never share your email address.
Join the Newsmax Community
Read and Post Comments
Please review Community Guidelines before posting a comment.
Get Newsmax Text Alerts

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

© Newsmax Media, Inc.
All Rights Reserved
© Newsmax Media, Inc.
All Rights Reserved