World Bank ends meetings with call to brace for risks
>> 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.’’