IMF vows to act swiftly to protect global growthStaff Writer | October 15, 2018
The International Monetary Fund (IMF) pledged to act swiftly to protect global economic growth and mitigate the effects of trade fights and geopolitical uncertainties.
World Overall, risks are increasingly skewed to the downside
The IMF said political trends, historically high debt levels, and rising financial vulnerabilities could further undermine confidence and growth prospects.
"With the window of opportunity narrowing, we will act promptly to advance policies and reforms to protect the expansion, mitigate risks, rebuild policy space, enhance resilience and raise medium-term growth prospects for the benefit of all," it said.
The IMF's latest survey of the world economy predicted that growth this year would remain steady at 3.7%, and stay at the same level next year.
In the statement, IMF members also pledged not to engage in currency devaluations to improve export competitiveness.
The US has accused China of intentionally weakening its currency, the yuan, in a possible attempt to offset US tariffs. China has denied the accusations.
The IMF said Friday that the trade war between the US and China and market turmoil caused by US interest rate hikes could slash economic growth in Asia by nearly 1% in the next two years.
"Considering all of these current and proposed tariffs, as well as their knock on effects on investor confidence and financial markets, the peak impact on China's output could be 1.6% over the first two years," said Changyong Rhee, the IMF's director for Asia and the Pacific.
"The Asia region as a whole would see a peak of GDP loss of up to 0.9%," he added.
The IMF warned that the current headwinds could last longer than expected and urged Asian economies to open up to trade and investment.
IMF members also said they were looking for ways improve the World Trade Organization to increase confidence in international trade.
"We acknowledge that free, fair and mutually beneficial goods and services trade and investment are key engines for growth and job creation," they said. ■