International Monetary Fund is optimistic about global growth and warns against squan
International Monetary Fund is optimistic about global growth and warns against squandering financial incentives
IMF chief Christine Lagarde said on Wednesday that the IMF was optimistic about global growth but cautioned that it had darker prospects as financial incentives and interest rates lifted.
Lagarde said in a speech in Hong Kong that the top priorities of the global economy are to stay away from trade protection, caution against financial risks and promote long-term growth.
Lagarde made the remarks at a time when the world is witnessing a trade dispute between the United States and China that creates a clear blur of companies and global supply chains.
"History shows that import restrictions are hurting everyone, especially the poorest consumers," she said.
The restrictions not only lead to more expensive products and more limited options, but also prevent trade from playing its key role in enhancing productivity and the diffusion of new technologies, she added.
The best way to address global imbalances was to use financial instruments or structural reforms, she said, adding that WTO rules faced the risk of "disintegration", which would be "an unforgivable collective political failure.
She stressed that policymakers need to stick to the path of action, resolve conflicts without exceptional measures and global growth momentum will slow in 2018 and 2019 because of fiscal stimulus, higher interest rates and more difficult financial conditions.
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