Published: Thu, October 11, 2018
Markets | By Terence Owen

China trade war and Brexit threaten global growth says International Monetary Fund

China trade war and Brexit threaten global growth says International Monetary Fund

With weakening growth and uncertainties over trade, smoothing the economic impact of structural adjustments and de-risking "is a very hard act of judgment that policymakers in China have to struggle with", Vitor Gaspar, director of the IMF's fiscal affairs department, told reporters at a separate briefing on its Fiscal Monitor, a report that tracks the state of countries' public finances. "We look forward to our continuing partnership", it added.

The International Monetary Fund (IMF) today warned African countries that their increasing indebtedness and failure to service their public debts was creating poverty for its citizens.

Trump has levied or threatened tariffs on goods from economies around the world, notably China, but also on traditional allies such as the European Union.

Among emerging market and developing economies, the growth prospects of many energy exporters have been lifted by higher oil prices, but growth was revised down for Argentina, Brazil, Iran, and Turkey.

The IMF said higher trade barriers could disrupt global supply chains, slow the spread of technology and ultimately lower global productivity and welfare.

Tobias Adrian, director of the IMF's monetary and capital markets department, told CNBC on Wednesday: "For the moment, we see a lot of differentiation across countries, so when we compare advanced economies to emerging markets, we see that financial conditions remain easy in advanced economies and they have tightened somewhat for emerging markets".

Lagarde told her audience on October 10 that she did not feel overly gloomy about global conditions. "I will take (the country) out of this", he said.

US President Donald Trump has accused China of deliberately manipulating its currency to gain a trade advantage, claims Beijing consistently rejected.

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"Trade deficits don't (necessarily) mean cheating by the other side".

'Strong growth over the summer is likely to reassure policymakers that the recent interest rate rise was warranted, but they'll be hoping to see the momentum maintained as Brexit approaches.

It is expected Pakistan will need a bigger sum this year to avoid a balance of payments crisis and stabilise a wobbly economy hurt by a shortage of dollars plus ballooning current account and fiscal deficits.

That would include boosting foreign currency reserves that could be used in a crisis, as well as working with local bond markets to build a local investor base, rather than relying on financing from overseas.

With much of the U.S.

But the U.S. organisation's study stresses that despite the Brexit uncertainty, banks are still safer now than they were in 2008 after the financial crisis.

In a separate report, the International Monetary Fund said the United Kingdom had historically weak public finances with high levels of debt and low levels of assets.

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