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With rising trade tensions, the global boom that began about two years ago is now plateauing and becoming less balanced. Growth forecasts for the global economy remain at 3.9% this year and next year, but downside risks have increased even in the short term.
He writes IMF chief economist, Maurice Obstfeld, in a preface to the organization's projected account on Monday. The risk that trade tensions will intensify – with negative effects on confidence, asset prices and investments – "is the biggest threat to global growth."
Should current trade be contrary to trade, customs and countermeasures? from other countries, become reality and take the confidence of falling among the companies, according to IMF World GDP would be about 0.5 percent lower in 2020 than in current forecasts. Maurice Obstfeld points out that the United States, threatened with countermeasures by many sources, is particularly vulnerable
. Other risks have also risen since the IMF spring forecast in April. Among other things, the political uncertainty in Europe has increased, with the contradictions of other migration policies and tax supervision.
Another Risk concerns the monetary policy of Federal Reserve where interest rate hikes faster than expected could push more countries than today. to undergo stronger pressure from a stronger state.
Maurice Obstfeld writes that while growth is still strong in developed countries, it has slowed down in many countries, including the euro area countries, Japan and the United Kingdom. Even in the United States, which continues to grow strongly, growth is expected to slow in the coming years as the long economic recovery is over and the temporary effects of fiscal stimulus diminish.
In emerging countries, for some major economies of Latin America, Central and Eastern Europe and Asia. Rising oil prices have led to higher forecasts for oil exporters, while oil importers have lowered forecasts.
Up to now, the financial markets have been rather quiet, values are high and spreads have been pushed in many countries. High debts create uncertainties at the same time.
"Asset prices are undoubtedly driven not only by weak financial conditions, but also by broadly satisfactory growth, so they are receptive to a sudden overvaluation of growth, and corporate earnings should be moderate," writes Maurice Obstfeld.
To support growth in the medium term, this trend growth should now be lower for many developed countries. Policymakers will need to act now to spur potential growth and resilience while reforming fiscal margins and carefully guiding monetary policy to keep inflation expectations firmly aligned with targets.
Maurice Obstfeld writes that governments need to protect economically "The widespread political dissatisfaction that carries many current political risks, including on the trade front, has its roots in experiences of non-inclusive growth and structural change. Many countries, reinforced by the financial crisis of 2007-09 and the s According to Maurice Obstfeld urgent measures are taken to address the underlying trends through policies conducive to growth and equality while guaranteeing the availability of macroeconomic tools to counter the next slowdown.
"Otherwise, the political future will only darken," he writes.
He writes that the countries in tackling these challenges, need to avoid thinking internally and remembering that row areas are crucial with international cooperation e) Among other things, it is to strengthen the multinational trading system, to reduce global imbalances, financial stability, international fiscal policy, cybersecurity, terrorism, disease control, global warming and climate change. migration.
