Global finance leaders hopeful for modest rebound in 2020

GLOBAL finance leaders agree that growth has slowed but they remain hopeful for a modest rebound next year as long as trade and geopolitical tensions do not worsen.

That was the assessment Friday, Oct. 18, 2019, from finance ministers and central bank governors of the Group of 20 major industrial countries.

Those officials met ahead of discussions Saturday with the policy-setting panels of the 189-nation International Monetary Fund and its sister lending organization, the World Bank.

The leaders of those two organizations appealed to their member countries to resolve the widening disagreements on trade, climate change and other issues, warning that the continued diversions threatened to worsen the current global slowdown.

Japanese Finance Minister Taro Aso, the current chair of the G-20 finance group, said while current conditions are less than optimal, there was still optimism that conditions will improve.

Speaking to reporters at a news conference after the G-20 discussions ended, Aso said, “We broadly agreed that the global economic expansion continues, but its pace remains weak.”

Aso said the group felt that the risks remained weighted to the downside with the major threats coming from trade wars and geopolitical tensions. But he said the expectation was that growth would pick up in 2020.

Japan served as chair of the G-20 this year, a position that will be taken by Saudi Arabia in 2020.

The United States is represented at the meetings by Treasury Secretary Steven Mnuchin and Federal Reserve Chairman Jerome Powell.

The IMF in its updated economic outlook prepared for this week’s meetings projected the global economy would expand by just three percent this year, the weakest showing in a decade, with 90 percent of the globe experiencing a downshift in growth this year.

But it is forecasting growth will accelerate slightly to 3.4 percent in 2020, still below the 3.6 percent global growth seen in 2018.

“Trade tensions are now taking a toll on business confidence and investment,” IMF Managing Director Kristalina Georgieva said in an opening speech to finance officials on Friday.

Georgieva, a Bulgarian economist who had been the No. 2 official at the World Bank, recognized the accomplishments of her IMF predecessor Christine Lagarde, the first woman to head that agency.

Lagarde was in the audience for the speech.