Published: Wed, October 09, 2019
Global News | By Blake Casey

International Monetary Fund and World Bank's New Leaders Warn of Deteriorating Global Outlook

International Monetary Fund and World Bank's New Leaders Warn of Deteriorating Global Outlook

The new head of the IMF Kristalina Georgieva painted a downbeat picture of the world economy in her first major address in Washington on Tuesday, saying the fund will cut its growth forecast for both 2019 and 2020 in its next World Economic Outlook due October 15. The research takes into account the US's planned tariffs on Chinese imports.

"Global trade voice has arrive to a advance standstill", she warned.

"In 2019, we expect slower growth in almost 90 percent of the world", she said. So, he said, "the world economy is now in a period of synchronized slowdown".

"This widespread deceleration means that growth this year will fall to its lowest rate since the beginning of the decade".

The Bulgarian took over leadership of the 189-nation International Monetary Fund this month following the resignation of Christine Lagarde, who was named chief of the European Central Bank.

Not only that, but the economic rifts could "last a generation" with possible shifts such as broken supply chains and siloed trade.

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Her warning comes ahead of the crucial trade talks between United States and China, scheduled later this week.

"That means dealing with subsidies, as well as intellectual property rights and technology transfers", she said, adding that a modernized trading system would unlock the potential of services and e-commerce. "In fact, low interest rates may give some policymakers additional money to spend", she said.

- In two years time the world has moved from synchronised upswing - in other words accelerating growth - to a synchronised slowdown, decelerating growth, and our forecast for this year and next year demonstrates that this slowdown is already impacting vast majority of the world. "Now, we see that they are actually taking a toll", Georgieva said in her first speech since she became head of the IMF, Efe news reported. IMF Managing Director Kristalina Georgieva said the slowdown was "more pronounced" in some of the largest emerging economies, including India and Brazil. Georgieva then told the minister that Argentina was at the top of the IMF's priorities and that they would work together to understand the country's economic and political difficulties. "The global economy is now in a synchronized slowdown", Georgieva said in a speech ahead of IMF-World Bank annual meetings next week.

"The key is to improve the system, not abandon it", she said.

Noting that the global economy is in a "synchronized slowdown", the new International Monetary Fund chief called for a "synchronized policy action" to accelerate growth and build more resilient economies.

She called on Germany, the Netherlands and South Korea to increase fiscal spending to support growth, but said such spending was not appropriate for all countries since public debt remained near record levels.

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