Global growth ’tilted to downside’ over trade tensions

GLOBAL financial officials say risks to worldwide economic growth were “tilted to the downside” due to factors such as trade tensions, policy uncertainty and the sudden tightening of financial conditions.

The higher risks are presenting against a backdrop of limited policy space, historically high debt levels and heightened financial vulnerabilities, officials said in the joint communique of the International Monetary Fund’s steering committee which met on Saturday.

The statement from the International Monetary and Financial Committee, or IMFC, was released at the spring meetings of the IMF and World Bank in Washington.

Earlier this week, the IMF cut its global growth outlook for the third time in six months.

The world economy will likely grow 3.3 per cent this year.

It is the slowest expansion since 2016 and 0.2 percentage points below the global lender’s estimate from January.

The IMFC urged the world’s central banks to form monetary policy aimed at ensuring that inflation remains on track towards targets and that expectations for price increases remain anchored.

“Central bank decisions need to remain well communicated and data-dependent,” it said.

The committee also said fiscal policy should be flexible and growth-friendly, but should be mindful of debt sustainability.