Global economy overcomes Brexit turbulence – IMF
The International Monetary Fund has said the global economy has managed to avoid “a catastrophic financial crisis” that was expected after the UK voted to leave the European Union on June 24.
The EU referendum, widely publicised as the Brexit, had been seen as a key driver of short-term risks in the past months, having caught investors by surprise.
In the aftermath of the Brexit, the IMF says, the global markets managed to operate without significant disruption, and no major disorderly events surfaced, other than a sharp sell-off in some UKbased real estate funds.
“The global financial system has been strengthened since the crisis, and the political shock was absorbed by markets,” the IMF said on Thursday in the latest series of the Global Financial Stability Report.
The assurance comes as relief for most countries in the Sub-Saharan Africa, which were among the markets expected to take a hit from the Brexit owing to entrenched trade links with Britain.
Kenya was particularly seen as a big casualty due to her extensive economic relations with the UK, largely in horticultural exports.
“New firewalls in the euro area, including the European Central Bank’s asset purchase programmes and other backstops, supported smooth market adjustment and prevented contagion,” the IMF said.