Global Economy Buffeted by Headwinds, But No Recession Looming: Lagarde
January 21 2019 - 08:28AM
Dow Jones News
By Greg Ip
DAVOS - The global economy is slowing and faces significantly
higher risks, the International Monetary Fund chief said
Monday.
A global recession is not around the corner, Christine Lagarde
told reporters at the release of the update to the IMF's economic
outlook in Davos, Switzerland, during the World Economic Forum's
annual meeting. "But the risk of a sharper decline in global growth
has certainly increased," she added.
She cited in particular the threat of higher tariffs, which has
already weakened financial markets globally which creates a
headwind to economic growth.
The IMF's chief economist, Gita Gopinath, said tighter financial
conditions are escalating risks to global growth. Emerging markets,
she said, face headwinds from outflows of capital and weakening
exchange rates.
The IMF assumes Britain will leave the European Union with a
deal that smoothes the transition. A no-deal Brexit is a major risk
to the outlook, she said.
The fund also assumes the U.S. will impose further tariffs on
China. If it doesn't impose further tariffs--as a result of current
negotiations underway between the two--that would represent a
positive risk to the outlook, Ms. Lagarde said.
Write to Greg Ip at greg.ip@wsj.com.
(END) Dow Jones Newswires
January 21, 2019 09:13 ET (14:13 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.