IMF's Lagarde Says Global Economic Outlook Darkening by the Day

[Butifldrm]

IMF's Lagarde Says Global Economic Outlook Darkening by the Day

By Reuters

• June 12, 2018

BERLIN — International Monetary Fund chief Christine Lagarde led an attack by global economic organisations on U.S. President Donald Trump's "America First" trade policy on Monday, warning that clouds over the global economy "are getting darker by the day".

Trump backed out of a joint communique agreed by Group of Seven leaders in Canada at the weekend that mentioned the need for "free, fair and mutually beneficial trade" and the importance of fighting protectionism.

The U.S. president, who has imposed import tariffs on metals, is furious about the United States' large trade deficit with key allies. "Fair trade is now to be called fool trade if it is not reciprocal," he tweeted on Monday.

In response, Lagarde unleashed a thinly veiled attack on Trump's trade policy, saying challenges to the way trade is conducted were damaging business confidence, which had soured even since the weekend G7 summit.

 

The Washington-based IMF is sticking to its forecast for global growth of 3.9 percent both this year and next, she said, before adding: "But the clouds on the horizon that we have signalled about six months ago are getting darker by the day, and I was going to say by the weekend."

"The biggest and darkest cloud that we see is the deterioration in confidence that is prompted by (an) attempt to challenge the way in which trade has been conducted, in which relationships have been handled and in which multilateral organisations have been operating," Lagarde said.

 

 

 

The IMF managing director spoke after a meeting in Berlin with German Chancellor Angela Merkel and the chiefs of the World Trade Organisation (WTO), the World Bank, the Organisation for Economic Cooperation and Development (OECD), the International Labour Organization and the African Development Bank.

Merkel said on Sunday the EU would implement counter-measures against U.S. tariffs and described Trump's rejection of the G7 communique as "sobering and a bit depressing".

Investors are fearful of a ***-for-tat trade war, though markets were relatively calm on Monday after an early wobble.

 

"STOP THIS ESCALATION"

WTO Director-General Roberto Azevedo told the Berlin news conference: "We must ... stop this escalation of tensions. A ***-for-tat process is not going to be helpful."

He also criticised the United States' conduct at the WTO.

"The U.S. has been focussing much more on bilateral -- unilateral even sometimes -- measures, which is not something that is support of the rules-based trading system.

"They have been complaining about the system, they say that they want to improve the system, but we would expect a more constructive approach on their part," Azevedo said.

Earlier, Germany's economy minister said Berlin saw no immediate solution to the trade row between the United States and other major economies but remained open to talks "among friends", seeking to head off a full-blown global trade war.

As Europe's biggest exporter to the United States, and with more than one million German jobs at stake, Germany is desperate to avoid an EU trade war with the United States.

"I believe a win-win situation is still possible," Economy Minister Peter Altmaier, one of Merkel's closest lieutenants, told broadcaster Deutschlandfunk.

"At the moment, however, it seems that no solution is in sight, at least not in the short term."

Particularly concerning for Germany, a major car exporter to the United States, is Trump's weekend tweet that Washington is looking at tariffs on automobiles.

 

The European Commission, which coordinates trade policy for the 28-member EU, aims to target 2.8 billion euros (£2.46 billion) worth of U.S. imports, including bourbon and jeans, with additional 25 percent duties from early July.

It already has broad backing from EU member states, but needs to consult with them in the next couple of weeks.

European Commission President Jean-Claude Juncker, while questioning whether the United States was truly an ally, said the bloc did not want to stop talking with Washington.

"We do not want to cut off discussions and further talks will of course need to address the automobile sector," he said.

https://www.nytimes.com/reuters/2018/06/12/business/12reuters-usa-trade-germany.html

[Pitcher]

 

"The biggest and darkest cloud that we see is the deterioration in confidence that is prompted by (an) attempt to challenge the way in which trade has been conducted, in which relationships have been handled and in which multilateral organisations have been operating," Lagarde said

 

 

WTO Director-General Roberto Azevedo told the Berlin news conference: "We must ... stop this escalation of tensions. A ***-for-tat process is not going to be helpful."

 He also criticised the United States' conduct at the WTO.

"The U.S. has been focussing much more on bilateral -- unilateral even sometimes -- measures, which is not something that is support system">support of the rules-based trading system.

 

Its a real simple fix. Europe and our other allies need to stop dumping their steel, aluminum, and autos in our country while they charge us tariffs for our products.  It was ok for us to lose millions of jobs to other countries but now that Germany is at risk of losing “a million” the WTO is all up in arms. Free trade doesn’t mean free for you while the USA gets hosed.  Free and Fair, get it Angela, no more dumping.  While we are pissing everyone off in Europe, let’s bring ALL our military back home.  Let Europe pay to defend themselves. 

[Synopsis]

1 hour ago, Pitcher said:

Its a real simple fix. Europe and our other allies need to stop dumping their steel, aluminum, and autos in our country while they charge us tariffs for our products.  It was ok for us to lose millions of jobs to other countries but now that Germany is at risk of losing “a million” the WTO is all up in arms. Free trade doesn’t mean free for you while the USA gets hosed.  Free and Fair, get it Angela, no more dumping.  While we are pissing everyone off in Europe, let’s bring ALL our military back home.  Let Europe pay to defend themselves. 

 

HEAR!!! HEAR!!!

 

AND The Best Of Your Week To You, Pitcher!!! 

[CSM (R) Thack]

1 hour ago, Pitcher said:

 

"The biggest and darkest cloud that we see is the deterioration in confidence that is prompted by (an) attempt to challenge the way in which trade has been conducted, in which relationships have been handled and in which multilateral organisations have been operating," Lagarde said

 

 

WTO Director-General Roberto Azevedo told the Berlin news conference: "We must ... stop this escalation of tensions. A ***-for-tat process is not going to be helpful."

 He also criticised the United States' conduct at the WTO.

"The U.S. has been focussing much more on bilateral -- unilateral even sometimes -- measures, which is not something that is support system' target='_blank' style=">support system">support of the rules-based trading system.

 

Its a real simple fix. Europe and our other allies need to stop dumping their steel, aluminum, and autos in our country while they charge us tariffs for our products.  It was ok for us to lose millions of jobs to other countries but now that Germany is at risk of losing “a million” the WTO is all up in arms. Free trade doesn’t mean free for you while the USA gets hosed.  Free and Fair, get it Angela, no more dumping.  While we are pissing everyone off in Europe, let’s bring ALL our military back home.  Let Europe pay to defend themselves. 

Well said!!🇺🇸

[Butifldrm]

World Trade Organization chief warns of global slowdown if trade conflict escalates

 

 

Roberto Azevedo

  

 Arab and international

 

Economy News Baghdad

The World Trade Organization (WTO) warned on Wednesday that the global economy may be adversely affected if the trade conflict between the United States and other countries escalates, pointing out that there are already signs of this.

"If the trade conflict escalates, there is a threat of a global downturn and we are already seeing signs that this downward trend has already begun," World Trade Organization (WTO) Director-General Roberto Azivido told the Handelsblatt daily. .

 

Views 34   Date Added 13/06/2018

 

http://economy-news.net/content.php?id=12634

[yota691]

International Monetary Fund: 3 looming risks threaten world economy

05:04 - 17/07/2018

 

 

 

Follow-up - Mawazine News 
The International Monetary Fund (IMF) has kept the outlook for global economic growth for the current and next year, but has highlighted the increased risk of disappointing performance due to looming risks. 
The World Bank's Global Economic Outlook for July reveals that global GDP will grow by about 3.9 percent in 2018 and 2019, the same as the previous April estimates. 
Disappointing performance The 
report confirms that the rate of economic expansion peaked in some major countries, but stressed the continuation of expansion during the current year and the next, although growth is less synchronized and increased prospects for disappointing performance next. 
The IMF sees the growth gap between the United States and Europe and Japan continuing to widen and growth imbalances between emerging market economies and developing economies are growing.
The report is due to rising oil prices, rising US Treasury yields and shifts in the wake of rising trade tensions and domestic uncertainty about the political situation. 
The IMF expects a gradual tightening of financial conditions as inflation rates rise, the labor market strengthens in developed markets, and inflation pressures and exchange rates are confronted by emerging economies. 
Economic Growth Estimates Growth 
is expected to continue at a faster pace than the general trend in advanced economies to 2.4% this year before falling to 2.2% in 2019. 
The July estimate is 0.1% lower than the previous forecast released last April , Due to slower-than-expected growth in the eurozone and Japan.
The IMF has estimated economic growth in the United States at 2.9 percent and 2.7 percent in 2018 and 2019, respectively, predicting a temporary short-term growth in the economy. 
Across the eurozone, the IMF cut its GDP growth forecast to 2.2% this year, 0.2% below previous estimates. 
At the 2019 level, the Eurozone economy is expected to grow 1.9% next year, 0.1% lower than April's expectations. 
The IMF has also cut economic growth estimates in Germany and France this year due to lower activity than expected in the first quarter. 
The IMF also trimmed estimates of Italy's economic growth this year on expectations that domestic demand will be affected by widening sovereign bond yields as well as tightening financial conditions following political uncertainties.
The IMF has decided to cut Japan's economy growth estimate by 0.2 percent to 1 percent this year after the contraction in the first quarter of the year as a result of weak private consumption and investment. 
While the report keeps the outlook for emerging and developing economies unchanged in the current and next year at 4.9% and 5.1% respectively, it sees adverse trends in recent months. 
The World Economic Outlook explains the opposite trends with rising oil prices, rising US Treasury yields, a rise in the US dollar as well as trade tensions and geopolitical conflicts. 
The report stresses that the outlook for emerging and developing market economies varies depending on how global factors interact with their local counterpart depending on the fundamentals of the economy and political uncertainty.
Strong performance in emerging and developing Asian economies is likely to continue to bring economic growth to 6.5 percent in 2018 and 2019, according to the report. 
While China's economy is expected to decline to a moderate level of 6.6 percent and 6.4 percent in the current and next year, respectively, compared to 2017 levels of 6.9 percent. 
In contrast, India's GDP growth is expected to accelerate to 7.3% this year and 7.5% in 2019 compared to 6.7% last year, as the negative impact of the currency exchange initiative and the application of GST would slow. 
However, estimates of India's economic growth are 0.1 percent lower and 0.3 percent lower in the current and next year compared to earlier forecasts in the April report because of the negative effects of higher oil prices on domestic demand and tightening monetary policy more quickly than expected due to higher inflation expectations.
Turkey's economic growth rate is expected to fall to 4.2 percent this year from 2017 to 7.4 percent, with economies with large external deficits being hit by tightening financial conditions, the report said. 
Risks on the Horizon 
While the International Monetary Fund (IMF) has maintained its view of the growth of the global economy with little change, it is noticeable that the balance of risks will increase in the short term, with political developments weighing on the possibility of escalation and continuation of trade disputes, in addition to tightening the global financial situation. 
Financial tensions are highlighted as one of these potential risks due to market reassessment of economic fundamentals and existing risks, including changing monetary policy expectations, the effects of heightened trade tensions, sudden increases in risk premiums or long-term investment premiums and increased political uncertainty.
The report argues that in the event of a sudden deterioration in the degree of risk appetite, the exit of capital flows from emerging markets could become more rapid and broader with a larger rise in the value of the US dollar. 
These transformations are likely to put pressure on highly leveraged or fixed-exchange economies or those with budget problems. 
The other danger lies in trade tensions, where the escalation of these differences could negatively affect investment and trade, as well as increasing uncertainty about the extent to which trade procedures will be applied with the potential to damage commodity prices and thus reduce productivity.
Over the past few months, the United States has imposed tariffs on a range of imports, prompting retaliation by its trading partners, as well as renegotiation of the North American Free Trade Agreement (NAFTA) as well as economic arrangements between the UK and the rest of the EU. 
The third risk is non-economic factors, namely, political uncertainty, including elections or their immediate consequences, as they increase the likelihood of slow implementation of reforms or the prospect of major changes to policy objectives. 
Geopolitical risks and internal conflicts also impose a heavy burden on the prospects in several economies and many countries remain vulnerable to the economic and humanitarian costs of weather and other natural disasters.