IMF warns US vulnerable in trade fight
“That’s hardly surprising, especially given that traditional funding sources, such as banks, tend to view small businesses as being incredibly high risk,” he said.
Jean-Pierre Seger from Sureswipe confirmed that this is true in the payment service provider’s experience.
“The biggest challenge most business owners face is access to working capital to invest in their business growth or assist with cash flow during seasonal cycles,” said Seger.
He said the partnership between Retail Capital and Sureswipe was changing this, and data from the two companies showed that, of the businesses to obtain funding, 79% used the money to reinvest in their businesses, mostly for expansion, renovation and stock purchases and of those, almost 64% had shown growth in the following four to six months. THE INTERNATIONAL Monetary Fund (IMF) warned yesterday that escalating and sustained trade conflicts were increasingly likely, threatening to derail economic recovery and depress medium-term growth prospects.
The IMF, in an update to its World Economic Outlook growth forecasts, said that the US, as the focus of retaliatory tariffs from trading partners, was especially vulnerable to a slowdown in its exports.
An escalation of tariffs to levels threatened by the US, China and other countries would have a direct effect on demand, heighten uncertainty and hurt investment, the IMF said.
“Our modeling suggests that if current trade policy threats are realised and business confidence falls as a result, global output could be about 0.5% below current projections by 2020,” IMF chief economist Maury Obstfeld said.
“As the focus of global retaliation, the US finds a relatively high share of its exports taxed in global markets in such a broader trade conflict, and it is therefore especially vulnerable.”
The IMF left unchanged its global growth forecasts at 3.9% for both 2018 and 2019, compared to its previous forecast issued in April.
Forecasts for the US and China were unchanged, with US growth pegged at 2.9% in 2018 and 2.7% in 2019. China’s growth was forecast at 6.6% in 2018 and 6.4% in 2019.
But the IMF cut its 2018 growth forecasts for euro zone countries, Japan and Britain, citing a softer than expected first quarter performance coupled with tighter financial conditions partly due to political uncertainty.
The euro zone’s 2018 growth forecast was cut to 2.2% from 2.4%, with Britain cut to 1.4% from 1.6%.
Japan’s growth projection was cut to 1.0% from 1.2%.
The IMF also trimmed 2018 forecasts for some emerging market countries, notably a half percentage point cut for Brazil to 1.8% due to the lingering effects of labour strikes and political uncertainty.
The fund also cut India’s growth rate by a tenth of a point to 7.5% due to the negative effects of higher oil prices on domestic demand and faster than anticipated monetary policy tightening due to higher inflation.
The IMF revised slightly upward 2018 forecasts for Saudi Arabia and several Commonwealth of Independent States countries other than Russia. – Reuters