Incoming ECB Chief Lagarde: President Trump can unlock uncertainty

Marco Green
October 21, 2019

IMF Managing Director Kristalina Georgieva said the threat from trade wars was a major discussion point for finance officials.

Former head of the International Monetary Fund Christine Lagarde, who was confirmed last week as the next president of the European Central Bank, said U.S. President Donald Trump is responsible for numerous risks facing the global economy, and warns that the rise of nationalism is not the answer to economic fears.

"I think the biggest key that President Trump has is in relation to predictability and, and certainty of the terms of trade". It's the unknown which is hurting, because you can't adjust to the unknown. So what do you do? You build buffers. You build savings. That's not propitious to economic development.

She highlighted that the level of uncertainty in the global economy risks a worldwide recession because investors "sit on their cash".

Former International Monetary Fund (IMF) chief Christine Lagarde has recently stepped down from her post after eight long service years.

While the Trump administration has suspended a $ 250 billion tariff increase on Chinese products due to come into force last week, few details about the deal have been announced and more important details have not been disclosed. "But the biggest and toughest issues remain". It said world growth would be at just 3% this year - down from its July forecast of 3.2%. Officials acknowledged that a range of factors could undermine that forecast, including continued trade fights and increased geopolitical risks.

Mnuchin said negotiations last week between the United States and China, the world's two biggest economies, had achieved "substantial progress" on phase one of a trade deal to resolve the USA claims that China is stealing intellectual property.

The IMF, in an updated economic outlook, projected the global economy would expand by 3% this year, the weakest in a decade, and said 90% of the world was experiencing a downshift in growth.

Other reports by Click Lancashire

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