Amid a global slowdown in the world economy, the International Monetary Fund Chief on Sunday warns the world economies of a looming slowdown, and asked them to gear up for its impact.
“The bottom-line – we see an economy that is growing more slowly than we had anticipated,” IMF Managing Director Christine Lagarde told the World Government Summit held in Dubai on Sunday.
Interestingly, IMF last month lowered its global economic forecast to 3.5% from a previous bit high growth rate of 3.7%.
IMF chief alluded to what she calls “four Clouds”, which according to her are the four most significant factors that can affect the global economic growth and warned of a “storm” that might be approaching world economies.
The fore factors that might lead to a “storm” as cited by Lagarde are “trade tensions and tariff escalations, financial tightening, uncertainty related to (the) Brexit outcome and spillover impact and an accelerated slowdown of the Chinese economy”
“We have no idea how it is going to pan out and what we know is that it is already beginning to have an effect on trade, on confidence and on markets,” she said, alluding to the anti-Globalization sentiment.
Since 2016, especially after the arrival of Donald Trump into the politics, the sentiment of Protectionism has been on rise and many major economies have started advocating the idea of protectionism. This is hampering the globalization and if not controlled can negate the impact of globalization. Lagarde also warned about the potential havoc that trade wars and protectionism can cause to global economy.