World Bank ends meet­ings with call to brace for risks

Bangkok Post - - ASIA -

>> NUSA DUA: Global fi­nan­cial lead­ers wrapped up an an­nual meet­ing of the In­ter­na­tional Mone­tary Fund and World Bank yes­ter­day by urg­ing coun­tries to brace for po­ten­tial risks from trade dis­putes and other ten­sions.

The meet­ings in Bali, Indonesia, this week were over­shad­owed by a spate of fi­nan­cial mar­ket tur­moil and by the threat to global growth from the trade clash be­tween the US and China over Bei­jing’s tech­nol­ogy poli­cies.

The In­ter­na­tional Mone­tary and Fi­nan­cial Com­mit­tee, which ad­vises the IMF’s board of gover­nors, is­sued a com­mu­nique, yes­ter­day, urg­ing coun­tries to keep debt un­der con­trol, engi­neer poli­cies to en­sure credit is avail­able in line with their lev­els of in­fla­tion and en­sure sus­tained eco­nomic growth “for the ben­e­fit of all’’.

IMF mem­bers also pledged to avoid de­valu­ing cur­ren­cies to seek a trade ad­van­tage by mak­ing a coun­try’s ex­ports rel­a­tively cheaper.

IMF Manag­ing Di­rec­tor Chris­tine La­garde said that while global growth is still strong, it has lev­elled off. The IMF started the meet­ings in Bali by down­grad­ing its 2018 es­ti­mate for global growth to a still ro­bust 3.7% from an ear­lier fore­cast of 3.9%.

“I think it’s not in­con­sis­tent to have a plateaued growth and down­side risks that are the clouds on the hori­zon, some of which have be­gun to open up,’’ Ms La­gard said. Adding that given the level of debt around the world, “we’ve given strong rec­om­men­da­tions and in terms of trade: de-es­ca­late and please di­a­logue’’.

Coun­tries should seek to en­sure their lev­els of debt are man­age­able and that poli­cies fos­ter growth for all, she said. “Sail to­gether and we will be stronger. Fo­cus on your poli­cies. Don’t drift and let’s co­op­er­ate as much as we can be­cause we will be bet­ter off to­gether.’’

China’s cen­tral bank gov­er­nor, Yi Gang, joined the cho­rus of con­ster­na­tion over the trade stand­off, which has re­sulted in Wash­ing­ton im­pos­ing penalty tar­iffs on tens of bil­lions of dol­lars of im­ports of Chi­nese prod­ucts and Bei­jing re­spond­ing in kind. Pro­tec­tion­ism and trade ten­sions are “ma­jor risks’’ for the world econ­omy, he said in a state­ment.

US Trea­sury Sec­re­tary Steven Mnuchin said it was still not cer­tain if Pres­i­dent Don­ald Trump would meet with his Chi­nese coun­ter­part Xi Jin­ping at a Group of 20 sum­mit late next month.

“I don’t think any de­ci­sion has been made in re­gards to a meet­ing,’’ he said. “The pres­i­dent will de­cide.’’

READY FOR ANY­THING: IMF di­rec­tor Chris­tine La­garde, left, Fin­land’s Fi­nance Min­is­ter Pet­teri Orpo, cen­tre, and Indonesia’s Fi­nance Min­is­ter Sri Mulyani In­drawati.

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