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Survey reveals growing pessimism among business leaders as trade tensions and uncertainty threaten Davos
The World Economic Forum (WEF) logo appears at the WEF annual meeting in Davos, Switzerland, on January 24, 2018.
PHOTO: REUTERS
DAVOS: The International Monetary Fund on Monday lowered its global growth forecast and a survey revealed growing pessimism among business leaders, as trade tensions and uncertainties weighed on the largest annual gathering of rich and powerful in the world. world.
The IMF's gloomy predictions, released on the eve of the World Economic Forum in Davos, Switzerland, have highlighted the challenges policymakers face in facing a range of real or potential crises from the US-led trade war. Chinese at Brexit.
"After two years of solid expansion, the global economy is growing more slowly than expected and the risks are rising," Christine Lagarde, Managing Director of the IMF, told the press.
"Does this mean that a global recession is imminent? No, but the risk of a more pronounced slowdown in global growth has certainly increased, "she said, urging policymakers to prepare for a" severe slowdown. "
In its report on the World Economic Outlook released on Monday, the IMF predicted that the global economy would grow 3.5 percent in 2019 and 3.6 percent in 2020, down 0 percent. 2 and 0.1% respectively compared to the forecasts of last October.
"There are so many global variables and uncertainties, ranging from trade tensions to geopolitical changes, so that many market activities and feelings are out of our control," said Laura Cha, President of Hong Kong Stock Exchange, Reuters Television. .
The IMF's downgrades mainly reflected signs of weakness in Europe: Germany, its exporting country, was penalized by the new fuel emission standards for cars and Italy was under pressure from the market because of Rome's recent budget stalemate over the European Union.
The global lender also spoke of a larger-than-expected slowdown in the Chinese economy and a possible "uncompromising" Brexit, which could worsen market turbulence.
A poll conducted by the audit and accounting giant, PwC, among 1,400 executives, revealed that 29% believe that global economic growth will decline over the next 12 months, the highest percentage ever recorded since 2012.
In the United States, the biggest change is in business leadership, but the proportion of CEOs expecting a slowdown in growth has increased significantly in all regions.
"It's quite a reversal from last year and the darker atmosphere is everywhere in the world," said Bob Moritz, global president of PwC.
"With rising trade tensions and protectionism, it goes without saying that trust is diminishing."
PwC US President Tim Ryan told Reuters: "The environment has been spoiled six to eight years after the financial crisis," describing an uncertain economy as the new normal.
"People are accustomed to volatility."
GLOOM ENLARGEMENTS OF CHINA
Fears of a global slowdown have shaken the markets and forced the US Federal Reserve to signal a pause in its rising interest rate cycle, as investors worry about the weak signs in China and the consequences of Sino-US trade frictions.
Data released Monday show that the Chinese economy slowed in the fourth quarter due to falling domestic demand and high tariffs in the United States, resulting in growth of 2018 to the lowest in almost three decades.
"Sometimes we scare ourselves, so it remains to be seen how slow is slow, how bad is bad, let's see what the first quarter looks like," said Cha.
Analysts polled by Reuters also believe that Japan may sink into a recession, which will keep the country's central bank under pressure to maintain its mbadive stimulus.
The IMF has cut its growth forecasts for the eurozone and developing countries, while maintaining its US expansion forecast of 2.5% this year.
It also maintained its growth forecast in China at 6.2 percent in 2019 and 2020, but said economic activity may not meet expectations if trade tensions persist, despite the efforts of the economy. State to stimulate growth by increasing budget spending and bank loans.
"As we saw in 2015-2016, concerns about the health of the Chinese economy can trigger brutal and significant sales in the financial and commodity markets, which put its trading partners, exporters of and other emerging markets under pressure, "he said.
Britain is expected to grow by 1.5% this year, despite uncertainties about the projection, which is based on the badumption of an orderly exit from the EU, has it? he adds.
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