The IMF warns about growing risks form the entire global economy, which may end up with a crash. The Fund urges international politicians and financial authorities to start taking urgent steps to stimulate demand and consumption.
According to IMF First Deputy Managing Director David Lipton, the global economy is indeed in jeopardy and is having a hard time withstanding the increasing amount of challenges. This is what he told the audience during his speech at National Association for Business Economics (NABE).
International politicians need to act immediately to curb the economic slowdown seen all around the globe and reverse the tendency. At the same time, they should be ready for new incoming challenges of all kinds, which are going to emerge as the result of multiple shocks in stock and commodity markets worldwide. He believes that this is the very time that requires backing the economic activity and stability as never before.
A sharp decline in global trade and capital flow seen over the last 12 months is one of the very factors puzzling the IMF. At the same time, Masterforex-V Academy experts say that the IMF’s concerns seem to be confirmed by the economic stats coming from China. According to February’s stats, China’s dollar-denominated exports crashed by more than 25% over the reporting period after losing another 11,2% a month before and showing the biggest monthly export decline since 2009. At the same time, China’s imports dropped by 13,8% in February for the 16th month in a row after losing 18,8% in January 2016. All of that looks like a big deal given the fact that China’s is the world’s second biggest economy.
According to Mr. Lipton, has come close to a reality where another major decline looks probable, especially if international governments are not going to take any urgent and efficient steps to back and stimulate economic growth.
The IMF is especially concerned about the existing situation as financial markets seem to have lost hope in international governments, thinking that the latter have already run out of opportunities to take efficient steps and lost confidence, which is crucial when it comes to resolving the challenges. At the same time, the IMF may well reconsider the existing global GDP forecast to downgrade it from 3,4%. This may happen this month. That’s why the IMF keeps on urging the political, economic and financial world to start doing something about it to back economic stability worldwide.
