Washington, US | April 21
The International Monetary Fund’s policymaking committee said Saturday that a strong world economy is threatened by increasing tension over trade and countries’ heavy debt burden. Longer-term prospects are clouded by sluggish growth in productivity and aging populations in wealthy nations.
In a statement at the end of three days of meetings, the lending agency urged countries to take advantage of the broadest-based economic expansion in a decade to cut government debt and to enact reforms that will make their economies more efficient.
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The IMF expects the world economy to grow 3.9 percent this year and next, which would be the strongest since 2011. But an intensifying dispute between the U.S. and China over Beijing’s aggressive attempt to challenge U.S. technological dominance has raised the prospect of a trade war that could drag down worldwide growth.
“Trade tensions are not to the benefit of anyone,” said Lesetja Kganyago, who leads the policymaking committee and is governor of the South African Reserve Bank.
The U.S. has resisted pressure to back off President Donald Trump’s protectionist America First trade policies.
Treasury Steven Mnuchin urged the IMF to do more to address what the Trump administration says are unfair trade practices and called on the World Bank to steer cheap loans away from China and toward poorer countries.
Unfair trade policies “impede stronger U.S. and global growth, acting as a persistent drag on the global economy,” Mnuchin said. He appealed for the IMF to go beyond its traditional role as an emergency lender for countries in financial distress.