World fi­nan­cial lead­ers fear trade war im­pact

Boston Herald - - BIZ SM@RT -

NUSA DUA, In­done­sia — 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 U.S. 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 while global growth is still strong, it has lev­eled off. The IMF started the meet­ings in Bali by down­grad­ing its 2018 es­ti­mate for global growth to a still ro­bust 3.7 per­cent from an ear­lier fore­cast.

“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,” La­garde said.

U.S. Trea­sury Sec­re­tary Steven Mnuchin down­played the level of alarm, say­ing he doesn’t lose sleep over the pos­si­bil­ity that China might step up its sales of U.S. trea­suries in re­tal­i­a­tion for pres­sure from Wash­ing­ton to al­ter na­tional eco­nomic strate­gies aimed at nur­tur­ing Chi­nese lead­ers in many ad­vanced tech­nolo­gies.

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

AP FILE PHOTO, TOP; AP PHOTO

TRADE TALK: U.S. Trea­sury Sec­re­tary Steven Mnuchin, top, down­played trade ten­sions at the IMF World Bank meet­ings in In­done­sia, left.

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