IMF Urges Policy Makers to Be Ready for Steeper Global Slowdown
All need to be ready in case there is a significant slowdown to respond much more forcefully: Acting IMF chief David Lipton.
(Bloomberg) -- The acting chief of the International Monetary Fund urged central bankers and other policy makers to be ready with more stimulus if a global economy already slowed by a trade war downshifts significantly further.
“All need to be ready in case there is a significant slowdown to respond much more forcefully,” based on economic data and other circumstances in their own countries, David Lipton, the IMF’s interim managing director, said in a Bloomberg Television interview Tuesday with Tom Keene and Nejra Cehic.
The Washington-based fund will release revisions to its World Economic Outlook in a week or so, said Lipton, who is running the Washington-based fund after Christine Lagarde stepped aside earlier this month when she was nominated to be president of the European Central Bank.
“We still see the global economy as sluggish. Investment is slow and trade growth is particularly slow,” he said. “When you look at the whole picture, one has to be concerned that this sluggish growth needs to be responded to.”
Lipton said the IMF would like trade tensions “replaced by dialogue and resolution, with some action.”
In April, the IMF reduced its forecast for global growth by 0.2 percentage point to 3.3%, and then a rebound to 3.6% in 2020.
“Right now our baseline is for sluggish growth and slightly stronger in 2020” and “not a slowdown to zero” or a recession, Lipton said. “The first rule is to do no harm to avoid a recession, and the second is all policy makers should be responding in a data-driven way to see what comes.”
To contact the reporter on this story: Olivia Konotey-Ahulu in London at okonoteyahul@bloomberg.net
To contact the editors responsible for this story: Fergal O'Brien at fobrien@bloomberg.net, Brendan Murray, Zoe Schneeweiss
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