IMF to discuss global economic tremors
Finance ministers, central bankers from 180 nations among 32,000 attendees
Rising protectionism, vulnerable emerging markets and record debt levels: The International Monetary Fund (IMF) holds its annual meeting this week in earthquake-stricken Indonesia, as it shines a light on tremors in the global economy.
Finance ministers and central bankers from 180 nations will be among 32,000 attendees in Bali for the annual meeting of the IMF and World Bank, which takes place every three years outside of Washington. The gathering will be held from Tuesday to Sunday.
The resort island of Bali is 1,125 kilometres from Palu, the city on Sulawesi that was wracked by an earthquake and tsunami on September 28 which left more than 1,500 dead and 1,000 missing.
But the focus of the meeting is averting economic rather than natural disasters. The trade war launched by US President Donald Trump against China, along with disputes with allies like the EU, Mexico and Canada, is a key source of concern. The dispute caused a proliferation of protectionist measures in recent months that is weighing on international trade.
Trump imposed tariffs on $250 billion (Dh918 billion) of annual imports from China, to pressure Beijing to change trade policies. Beijing countered by imposing punitive duties on $110 billion of US products.
Materialising risks
Like the OECD, which lowered its economic growth forecast for the world economy to 3.7 per cent for 2018, IMF chief Christine Lagarde signalled the fund would cut the outlook that in July stood at 3.9 per cent.
After sounding the alarm in recent years about threats to the global economy, Lagarde said last week “some of those risks have begun to materialise” and “there are signs that global growth has plateaued.”
The rise in trade barriers is slowing trade, and dampening investment and manufacturing as uncertainty increases, she said. She repeated the warning about rising debt levels which “reached an all-time high of $182 trillion — almost 60 per cent higher than in 2007.”
That creates concerns for emerging markets which will come under increased pressure as the US central bank raises interest rates. Argentina and Turkey have already seen their currencies collapse.