Fund warns on slow world economic gowth


THE International Monetary Fund has warned that a continued economic stagnation around the world is fuelling more populist sentiment against trade and immigration.
The IMF has singled out Britain’s shock decision to leave the European Union and the rise of Donald Trump in the United States as two key areas of uncertainty.
The warning comes as the IMF left its growth forecasts unchanged from its July update at 3.1 per cent for 2016 and 3.4 per cent for next year, after having previously cut its forecasts for five consecutive quarters.
However, the forecast is a 0.1 per cent downgrade on the World Economic Outlook from April, which has raised the IMF’s concerns that the global economy is “moving sideways”.
“Without a determined policy action to support economic activity over the short and longer terms subpar growth at recent levels risks feeding on itself through the negative economic and political forces it is unleashing,” IMF chief economist Maurice Obstfeld told reporters in Washington.
Obstfeld cited Brexit as a ongoing risk for the world, even though markets quickly stabilised after the June 22 referendum outcome.
“I think it would have been malpractice not to think about those possibilities and clearly central banks did think about those possibilities,” he said.
“They did prepare for them. Markets knew they were preparing for them and I would credit that preparation in part for the mild response that we ended up, ended up seeing.”
But he said the world economy will be stagnant as it would not experience a gradual change.
IMF stated that it was the concern of all countries to alter and divrse economic activities to stimulate the economic growth. – BBC

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