The International Monetary Fund (IMF) expects 70% of the global economy to experience a slowdown over 2019, Christine Lagarde, the IMF managing director, said on Tuesday over her speech at the American Chamber of Commerce, before the IMF’s Spring Meetings next week.
“But, to be clear, we do not see a recession in the near term. In fact, we expect some pickup in growth in the second half (H2) of 2019 and into 2020,” she mentioned.
Lagarde noted that the IMF projected global growth for 2019 and 2020 at about 3.5% in January which is less than the achieved in the recent past, but is still reasonable.
“We have looked at what might happen if tariffs on all goods traded between the US and China went up by 25%,” she mentioned, adding that this alone would reduce annual GDP by up to 0.6% in the US and by up to 1.5% in China.
The IMF has supported economic programmes in over 90 countries since the financial crisis in 2008, including the recent support for critical programmes in Egypt, Tunisia, Jordan, Ukraine, and Argentina, Lagarde said.
The fund committed over $500bn during the global financial crisis to help prevent another Great Depression, she mentioned, adding that the fund’s work continues to help countries to open up their markets and encourage investment.
“To do our job effectively, of course, we need to be sufficiently well resourced into the future. For that, we rely on the support of our 189 member-countries. This is another issue that I expect our ministers and governors will discuss at our Spring Meetings next week,” she mentioned, affirming her confidence that the support from the fund’s membership remains strong.