Wed, Dec 07, 2022 @ 13:41 GMT
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IMF Obstfeld: Some governments pursue reforms, trade disputes divert others

In the new World Economic Outlook released today IMF kept global growth forecast unchanged at 3.9% in 2018 and 3.9% in 2019.

For advanced economies, growth projections for 2018 were generally revised up except Japan and Canada. For 2019, projections were largely unchanged with upward revision in US, France and Spain.

China’s growth projection was kept unchanged at 6.6% in 2018 and 6.4% in 2019.

Here is the summary table.

Full IMF report here

In a blog post by Maurice Obstfeld, Economic Counsellor and Director of Research at the IMF, it’s noted that “the world economy continues to show broad-based momentum. Against that positive backdrop, the prospect of a similarly broad-based conflict over trade presents a jarring picture.”

Obstfeld said that “prospect of trade restrictions and counter-restrictions threatens to undermine confidence and derail global growth prematurely.” And, without naming who, he added that “while some governments are pursuing substantial economic reforms, trade disputes risk diverting others from the constructive steps they would need to take now to improve and secure growth prospects.”

Referring to intensification of trade tensions since US announcement of steel and aluminum tariffs, Obstfeld said “these initiatives will do little, however, to change the multilateral or overall U.S. external current account deficit, which owes primarily to a level of aggregate U.S. spending that continues to exceed total income.”

The full blog post can be found here. Global Economy: Good News for Now but Trade Tensions a Threat

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