IMF warns of anti-globalization forces

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IMF warns of anti-globalization forces

21/10/2017 12:00 am  Anna Isaac - Translation: Khaled Kassem  is a growing momentum behind the anti-globalization movements, one of the main threats to the recovery of the global economy, and puts productivity and living standards at risk, says the IMF.  The recent outlook for future economic health is based on a good global financial environment and the recovery of developed countries as it leads to the strengthening of international economic activity.  Global growth is expected to rise to 3.6 percent this year and 3.7 percent next year, 10 percentage points higher than the IMF forecast in April.  The outlook for developing countries is also very positive, with growth reaching 4.6 percent this year and 4.9 percent in 2018 due to China's economy. But the weak performance of the UK economy in the first half of this year led the IMF to lower its April forecast by three percentage points to 1.7 percent this year.  The report also noted: "The medium-term outlook for Britain is uncertain and depends on its future mutual relations with the EU."  The IMF expects the euro zone to recover this year, rising to 2.1 percent before falling next year to 1.9 percent.  "The medium-term view of the euro area remains constrained", where weak productivity, negative demographic status and public and private debt levels in some countries act as potential brakes on future growth. In the major countries, any negative economic impact of the gradual increase in long-term interest rates will be offset by the easing of lending conditions. The IMF expects that the transition to normal monetary conditions in Britain and America will be smooth and will not cause market volatility. Quantitative easing and raising interest rates.  Inflation has posed a threat to the strong pace of global recovery, but the main concern is less than long-term, long-term inflation that deepens downside risks to the medium-term growth prospects of developed countries. The IMF believes this could reduce the ability of central banks to cut real interest rates in any other economic downturn. Although the growth outlook was very optimistic, the report cautioned that the low levels of wage rates since the financial crisis and the growing income gap have created a sense of disillusionment with globalization.  The United States and the euro zone are the most at risk of anti-globalization, and if their growth fails to be more inclusive, it may remove the political consensus needed to move forward with market-friendly reforms.  The emergence of protectionist policies is another factor that disrupts global supply chains, hits productivity and makes buying consumer goods more difficult, and the indirect effect of this is the increase in the number of low-income families.  Daily Telegraph