New IMF chief Georgieva says world suffering ‘synchronised slowdown’


The global economy is going through a "synchronised slowdown", claimed the new managing director of the IMF Kristalina Georgieva during her inauguration speech.

For the global economy, the cumulative effect of trade conflicts could mean a loss of around Dollars 700 billion by 2020, or about 0.8 per cent of GDP, she said, which is far higher than the fund previously forecast as its worst case scenario.

Referring to a new International Monetary Fund research, which shows how structural reforms can raise productivity and generate enormous economic gains, she said these changes are the key to achieving higher growth over the medium and long-term.

The IMF expects slower growth in almost 90% of the world this year. "The global economy is now in a synchronised slowdown".

"This widespread deceleration means that growth this year will fall to its lowest rate since the beginning of the decade", she added.

Ms. Georgieva, a Bulgarian economist who had held the No. 2 job at the World Bank, was selected last month to succeed Christine Lagarde, who has been tapped to be the new head of the European Central Bank, overseeing monetary policy for the 19 nations that use the euro currency.

"Even when voice picks-up in 2020, the hot rifts would possibly per chance per chance well per chance outcome in adjustments that final a technology - broken provide chains, siloed trade sectors, a "digital Berlin Wall" that forces worldwide locations to fabricate a resolution from technology techniques", the Bulgarian economist added who held the No.2 job on the World Bank.

US President Donald Trump is trying to reduce the trade deficit, while China disagrees with Washington's policies and responds with similar measures.

"There is a serious risk that services and consumption could soon be affected", she said.

"I am confident that if we cooperate - mindful of each other's challenges and interests - we can deliver a better future for all", she said.

"Everyone loses in a trade war", she said.

But this has reversed in recent years, partly due to slower economic growth and a maturing of manufacturing in dynamic regions such as China.

In her diagnosis, Georgieva argued that economic exercise is softening in developed economies, such because the US, Japan and, particularly, the eurozone, whereas in a kind of emerging markets, comparable to India and Brazil, the slowdown is even more pronounced this year.

Ms. Georgieva's first speech as head of the International Monetary Fund was billed as a preview for next week's annual meetings in Washington of the International Monetary Fund and its sister lending organization, the World Bank. The key, she said, is to recognize that "inequalities are a drag on multilateralism and drag on growth".

Georgieva said countries need to discuss legitimate trade issues such as subsidies, intellectual property rights, and technology transfer.

Germany, the Netherlands and South Korea should increase spending on infrastructure and research to boost demand and growth potential.